Botswana

Value-added Tax (VAT) Amendment Act 2025  

Following the announcement of proposed changes to Botswana tax legislation during the 2025/2026 Budget Speech, the Minister of Finance Ndaba N. Gaolathe presented The Value Added Tax (Amendment) Bill No. 22 of 2025 to the National Assembly, which intends to introduce the taxation of remote services and mandate electronic invoicing. This Bill has been approved by Parliament, which has yet to announce the effective date.

Purpose of the Amendment 

• Modernise VAT law to address digitalisation and remote services.
• Ensure fair taxation between domestic and non-resident suppliers.
• Improve VAT collection and reduce under-reporting.
• Introduce fiscal devices for better compliance.

Key changes introduced

Taxation of remote services

• Non-resident suppliers must collect and remit VAT for unregistered persons in Botswana.
• Registered persons, government entities, and exempt bodies apply reverse-charge mechanism.
• No input tax credits for remote service suppliers. 

Place of supply rules

• Defines when a service is considered supplied in Botswana.
• Includes services performed in Botswana, related to property, inbound tourism, and telecom services used only in Botswana.

Determining residency

• Residency based on billing address, IP address, bank details, mobile code, etc.
• Most reliable indicators used when conflicting information exists. 

Electronic marketplaces

• Operators may be deemed suppliers if they authorise charges/delivery or set terms.
• Excludes marketplaces that only process payments.

Reverse-charge mechanism

• Applies to services supplied to registered persons or government entities and large unregistered persons by non-resident suppliers.
• Value based on fair market value at time of supply.

Registration and tax periods

• Remote suppliers must register if annual supplies exceed 500,000 Botswana pula (BWP).
• Tax periods: Two months for government entities / large, unregistered persons; quarterly for non-resident suppliers. 

VAT documentation and notification

• Remote suppliers must maintain documentation and provide it upon request.
• Registered recipients must notify suppliers of their VAT status.

Input tax and adjustments

• No input tax credit for suppliers without a fixed place of business in Botswana.
• Over/underpaid VAT must be adjusted in the next return.

Fiscal devices

• Mandatory use of electronic fiscal devices for issuing tax invoices.
• Penalties: BWP 10,000/month for non-use; up to BWP 100,000 fine or two years imprisonment for tampering or false receipts.

VAT representatives

• Commissioner General may require appointment of a VAT representative in Botswana.
• Representatives are personally liable for VAT obligations.

Currency conversion

• Remote suppliers may report/pay VAT in foreign currencies with approval.
• Exchange rates based on telegraphic transfer buying rate.