Bill, not law: South Africa's B32-2026 proposes new VAT rules for leasehold improvements and e-services intermediaries from 1 April 2027

What changed in detail

This is a bill before Parliament, not law. The Taxation Laws Amendment Bill [B32—2026], introduced in the National Assembly on 21 October 2026, contains two VAT amendments that would each come into operation on 1 April 2027.

Leasehold improvements (clause 36). The bill would substitute section 18C of the Value-Added Tax Act, 1991. Where goods are supplied to a vendor-lessor as contemplated in section 8(29) and input tax would have been denied, or the goods are not wholly used for taxable supplies, the lessor would be deemed to supply them when the improvements are completed, valued by the formula A × B × C (the tax fraction, the agreed or open-market value of the improvements, and the percentage of non-taxable use). A lessor that is not a vendor would have to obtain, complete and retain the Commissioner’s prescribed form and pay the tax within 30 days of the time contemplated in section 9(12).

Electronic services through intermediaries (clause 37). The bill would amend section 54(2B), which deems who makes a supply of electronic services supplied by a vendor intermediary on behalf of a principal to a person in the Republic. In the bill’s notation, words in bold square brackets are deleted and underlined words inserted; the amended paragraph (a) reads “that supply shall be deemed to be made by such intermediary and not by that principal unless the principal and intermediary agree, in writing, to treat that supply as if made by the principal.” The intermediary would therefore be the deemed supplier by default, and the principal only where the two agree so in writing. Paragraph (b) would make the principal and intermediary jointly and severally liable except where they have such an agreement.

What it means

Nothing changes until the bill is enacted. If it passes as introduced, lessors that are not VAT vendors would gain a hard 30-day window to account for VAT on improvements a lessee makes, which property owners outside the VAT net may not be tracking today. For electronic services, the vendor intermediary would account for the VAT by default; a written agreement is what moves the supplier role to the principal, and it also takes the parties out of joint and several liability. Platforms and their foreign principals should check whether their existing contracts already contain such an agreement before 1 April 2027.