As of June 1, 2014, South Africa requires non-resident entities like Twilio Inc. dba SendGrid & its affiliates (hereinafter, “Twilio SendGrid”) to collect Value Added Tax (VAT) for any Electronically Supplied Services (“ESS”) sold to all customers located in South Africa. This guide covers how Twilio charges VAT and what services are taxable.
The following topics are discussed in this guide. Click a topic to skip directly to this information:
- Value Added Tax (VAT) overview.
- When will Twilio Sendgrid start charging VAT in South Africa?
- How can I be tax exempt for VAT?
- How is VAT determined?
- What rate is VAT charged in South Africa?
- Where can I see the VAT charged on my Invoice?
Value Added Tax (VAT) overview
South African Revenue Service (SARS) passed legislation effective June 1, 2014, requiring non-resident entities selling digital services to collect and remit an 15% Value Added Tax (VAT) on its sales to all customers located in South Africa. Non-residents are required to apply VAT on both Business to Customer (B2C) transactions and Business to Business (B2B) transactions.
When will Twilio Sendgrid start charging VAT in South Africa?
Twilio SendGrid will begin collecting VAT on services sold to customers located in South Africa starting in February 2024.
VAT is assessed and applied to your account at the start of the month for the previous month’s usage. For example, you will be charged VAT for your February usage in March.
How can I be tax exempt for VAT?
Twilio SendGrid Inc is required to impose VAT on both B2B and B2C customers. In other words, there are no exemptions provided under the tax provisions for the type of services that Twilio SendGrid Inc provides in South Africa. This includes but isn't limited to public school, university, charitable organizations, religious body, etc.
How is VAT determined?
VAT is applicable based on the type of products or services that are purchased. We have determined that most of Twilio Sendgrid's products & services are subject to VAT in South Africa.
What rate is VAT charged in South Africa?
Twilio SendGrid's services will be subject to the 15% VAT rate as determined by the South African Revenue Service ( SARS)
Where can I see the VAT charged on my Invoice?
You can see the VAT amount charged in the Tax Summary section of your invoice. Your invoice will continue to show subscription charges, usage and taxes in the same currency as before.