On 12 December 2013, the Presidency of South Africa gazetted Act No. 31 (Taxation Laws Amendment Act, 2013). In article 165, the Value-Added Tax Act is amended so as to require foreign suppliers of electronic services to South African residents, or whenever the payment for those services originates from a South African bank, to register as a South African VAT vendor. As such, they will be required to levy VAT on their sales at a rate of 14%.
 
Small vendors, achieving sales of less than R 50,000 (approx. US$ 4,560) per period of twelve months, are exempted from this obligation - this is markedly lower than the threshold for all other taxable supplies at R 1,000,000 (approx. US$ 91,175). The lower threshold for electronic services was introduced to level the playing field between local and foreign suppliers of electronic services.
 
A later Regulation, R. 221 of 28 March 2014, defined which electronic services are to be included under the new VAT provisions, i.e.:

• educational services (distance teaching and the like),
• electronic games,
• games of chance/internet betting,
• internet-based auctions,
• the supply of e-books, audio-visual content, photographic images, music,
• subscription services to any website, including blogs, journals, magazines, newspapers, social networking sites, and any of the categories mentioned above.

 
The measure was originally scheduled to enter into effect on 1 April 2014, but this was subsequently postponed to 1 June 2014.