South Africa is considering removing the requirement for foreign digital service providers to charge VAT on B2B transactions. Under the proposed change, effective April 1, 2025, South African businesses would become responsible for self-reporting VAT through a reverse charge mechanism.

The bottom line: This change would eliminate the need for non-resident companies selling digital services exclusively to South African businesses to maintain VAT registration in the country. Currently, South Africa requires VAT on foreign digital services for both B2C and B2B transactions.