Botswana’s Value Added Tax framework has introduced important requirements relating to remote services and reverse charged supplies, affecting businesses, Government entities, certain unregistered persons and suppliers of services located outside Botswana.
The Value Added Tax Act, 2026, together with the Value Added Tax Regulations, 2026, outlines how VAT should be treated when services are supplied across geographical borders or acquired from suppliers that do not conduct a taxable activity from a place of business in Botswana.
Understanding these requirements is particularly important for organisations purchasing services such as cloud storage, website hosting, consultancy services, professional services, digital content and other services supplied remotely.
What are remote services?
Remote services generally refer to services where there is no direct connection between the geographical location where the service is performed and the location of the recipient.
Under the legislation, remote services may include services supplied to a person resident in Botswana, services relating to immovable property in Botswana, certain telecommunications services and inbound tourism related services.
Examples of services identified as remote services include:
- Online e books, music, films, gaming services and other digital content
- Website hosting and cloud storage
- Electronic data management
- Distance learning courses
- Legal, accounting and consultancy services
- Services supplied through electronic marketplaces
The legislation therefore has implications for both individual consumers and organisations that purchase services from suppliers located outside Botswana.
What is a reverse charged supply?
A reverse charged supply may arise where services are supplied by a person who does not conduct a taxable activity from a place of business in Botswana to a qualifying recipient in Botswana.
The recipient may include:
- A business registered for VAT in Botswana
- A Government entity
- A large unregistered person
In these circumstances, responsibility for accounting for VAT may shift from the overseas supplier to the recipient of the service. The DSS guide explains that Government entities and large unregistered persons are required to register with BURS for purposes of accounting for reverse charged supplies.
Who is affected?
The rules affect both suppliers and consumers of remote services.
Consumers may incur VAT at 14% on services where VAT was not previously charged. Suppliers of remote services may also be required to register for VAT in Botswana.
For reverse charge purposes, the rules specifically identify VAT registered businesses, Government entities and large unregistered persons making supplies exceeding P1 million.
Requirements for consumers of remote services
For individuals and small unregistered persons, the primary requirement is payment of the VAT charged on the remote service.
Large unregistered persons and Government entities have additional obligations. These include registering for reverse charged supplies and filing returns every two calendar months.
Registered persons acquiring remote services are also required to notify the supplier of their VAT registration so that VAT is not incorrectly charged by the supplier.
Important dates to know
The implementation of these provisions includes several important dates:
- 1 July 2026: The Value Added Tax Act, 2026 came into operation.
- 1 August 2026: Government entities and large unregistered persons commenced accounting for reverse charge.
- 1 October 2026: Suppliers of remote services are required to commence charging VAT.
- 1 October to 31 December 2026: First tax period for remote service suppliers.
- 28 January 2027: Due date for the first return by remote service suppliers.
Remote service suppliers will thereafter generally operate on quarterly tax periods.
With 1 October 2026 approaching, businesses and service providers should review their arrangements now to determine whether the remote services or reverse charge provisions apply to them.
Recipient created tax invoices and record keeping
Reverse charged supplies also introduce specific invoicing requirements.
A Recipient-created Tax Invoice should contain information including the recipient’s name, address and TIN, an individualised serial number, the invoice date, a description of the services supplied, the date of supply, consideration and VAT charged.
Tax invoices and supporting documentation must also be retained and made available for BURS inspection for a period of eight years.
Is your organisation prepared?
The treatment of remote services and reverse charged supplies can have important VAT registration, invoicing, reporting and compliance implications.
Organisations purchasing professional services, digital platforms, cloud services, software, online services or other services from suppliers outside Botswana should assess whether the new provisions affect their transactions and VAT obligations.
DSS has prepared a detailed guide explaining the requirements, affected parties, key dates, registration requirements and tax treatment of remote services and reverse charged supplies.
Download the full guide
VAT Implications of Reverse Charge Supplies and Remote Services [Download the DSS Guide]
For assistance understanding how these provisions may apply to your organisation, contact the DSS Tax Team:
Email: tax@dss.co.bw
Phone: +267 3952474
Website: www.dss.co.bw
This article provides a high level overview for general information purposes and should not be regarded as transaction specific tax, accounting, legal or other professional advice. The underlying DSS publication states that its information reflects information available as at 30 June 2026.