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Apple adding VAT to iTunes apps within 24 hours

In the 2013 budget speech made by South Africa’s former minister of finance, Pravin Gordhan, he made provision for value added tax (VAT) of 14% to be levied on digital goods and services like ebooks, digital music and even apps. Apple, who are one of the most prolific purveyors of things that are digital in nature, have just sent an email out to its database of South African developers informing them that within the next 24 hours VAT will be levied on all of the apps that they sell through the iTunes app store.

Apple notifies SA developers of VAT

While the mail doesn’t specify whether other digital content such as in-app purchases or music will be burdened with the extra tariff, we would expect it to be the reality of a South Africa post digital taxation. Saffas should also be prepared to see prices of all other digital content take a 14% jump in the near future as more companies start to raise their prices to comply with the new legislation.

Normally, companies only have to register as VAT vendors in South Africa when they hit R1 million in taxable sales of either good or services, the digital tax however is mandatory for any company that does more than R50 000 of taxable sales which would account for all of the major players in the industry including, Apple, Amazon and Google.

[Source & image – 9to5Mac]

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