Based on the information given on the Standard Bidding Document (SBD) 1 Form or Municipal Bid Document (MBD) 1 Form, foreign entities are not liable for tax in South Arica. The NT Instruction Note 7 of 2017/2018 was repealed and replaced with NT Instruction Note 9 of 2017/2018, and a Municipal MFMA Circular No 90 was issued together with the revised (SBD) 1 Form and (MBD) 1 Form respectively.
How to verify tax compliance status of foreign suppliers?
The new process for tax compliance status verification of foreign suppliers is that, the relevant government institution procuring the goods or services from the foreign entity, must submit the completed SBD 1 Form, or MBD 1 form of the recommended bidder to the SARS Government Institutional Compliance (GIC) Unit on GovernmentInstitute@sars.gov.za. SARS will review the submitted documents and depending on the result, a letter will be issued by SARS through the GIC Unit to the government institution, and not to the foreign entity. The letter will confirm that, based on the information provided, the foreign entity is not liable to be registered for tax in South Africa, at that specific point in time.
