Source: https://rivet.global/blog/south-africa-companies-paying-offshore-saas-vat-imported-services
Published: 2026-10-26 · Updated: 2026-10-26 · By Rashidatou K.

# South African companies paying offshore software and services: VAT on imported services

South African companies buying services abroad may owe VAT on imported services, and foreign digital suppliers may charge SA VAT. How both work.

## Key takeaways

- Foreign suppliers of electronic services to South African customers must register and charge South African VAT above a threshold.
- Since 2019, the electronic services rules cover most B2B digital services too, with some exceptions.
- For other services bought from abroad, VAT on imported services may apply when the services are not used for taxable supplies.
- Payments abroad go through authorised dealers under exchange control, with documentation.

A Cape Town insurance broker spends about R184,000 a month abroad: a US CRM, a European document platform, cloud hosting and a UK consultancy. Its accountant checks two VAT questions each month: whether the foreign software providers are charging South African VAT, and whether the UK consultancy's fee is an imported service on which the broker must account for VAT itself.

## Electronic services

Foreign suppliers of electronic services to South African recipients must register for South African VAT once their South African sales pass the threshold. Since 2019 the rules cover a wide range of B2B digital services, not only consumer services, with some exceptions, such as certain services supplied within a group. Registered suppliers charge VAT on their invoices.

## Imported services

For other services from non-residents, such as consulting from London, the South African recipient may have to account for VAT on imported services. This mainly affects recipients that do not use the services wholly to make taxable supplies, such as partly exempt businesses in financial services. Fully taxable VAT-registered businesses are usually not affected.

## Exchange control

Payments abroad go through authorised dealers. Most routine service payments are straightforward with an invoice. Larger or unusual payments may need more documentation.

## Controlling spend

Software subscriptions accumulate. Separate cards per tool or team, each with an owner and a limit, keep spend visible and easy to cancel.

## Paying into South Africa: the local rail

| What | Detail |
|---|---|
| Local rail | Real-time clearing (RTC) and PayShap for instant transfers; EFT for batch payments |
| Run by | BankservAfrica |
| Settlement | RTC and PayShap in seconds; EFT within one to two business days |

Source: [BankservAfrica](https://www.bankservafrica.com/). Checked when this guide was last updated; the scheme's own page has the current figures.

## Where Rivet fits

Rivet opens business accounts for registered companies after verification. South African companies should follow exchange control rules on holding funds abroad and check with their authorised dealer. South African founders' companies registered elsewhere can use a Rivet business account with Visa company cards, per-card limits and US account details on every plan. Rivet is not a bank; regulated partner institutions hold the funds.

## Questions

### Do foreign SaaS providers charge South African VAT?

Many must. Foreign suppliers of electronic services to South African recipients register for VAT once they pass the threshold and charge VAT on their invoices.

### What is VAT on imported services?

VAT that a South African recipient may have to account for when it buys services from a non-resident supplier and does not use them fully to make taxable supplies.

### Does a VAT-registered company pay VAT on imported services?

Usually not, if the services are used wholly to make taxable supplies. Partly exempt businesses may.

### Are there exchange control rules for paying foreign software?

Payments abroad go through authorised dealers, which may ask for invoices. Most routine service payments are straightforward.