Overview
Botswana introduced VAT on remote services supplied by non-residents through the Value Added Tax Act, 2026 and the Value Added Tax Regulations, 2026 (giving effect to the VAT (Amendment) Act, 2025). "Remote services" are defined in section 2 of the Act as services where, at the time of supply, there is no necessary connection between where the supplier physically performs the service and where the recipient is located, excluding accredited degree or diploma programmes. This covers digital content, online platforms, software and software maintenance, cloud services, website hosting, and remotely provided professional services.
Non-resident suppliers must charge and remit VAT at 14% on supplies to consumers (B2C), while supplies to registered persons, government entities, and large unregistered persons are reverse charged by the recipient (B2B). Registration is required where taxable remote services to Botswana exceed, or are expected to exceed, BWP 500,000 (circa USD 37,250) in any 12-month period. Registration commenced on 1 June 2026, and the charging obligation from 1 October 2026.
Key provisions applicable to VAT on ESS
| Particulars | Description |
| Scope | B2C |
| Liability to remit VAT | Depends on the status of the recipient. |
| VAT rate | 14% |
| Taxable value | The price payable by the recipient for the supply. There are no separate levies forming part of the taxable value of remote services. |
| Effective date | The VAT Act, 2026 came into operation on 1 July 2026. Registration of non-resident remote service suppliers commenced on 1 June 2026, and the obligation to charge and remit VAT commenced on 1 October 2026. |
| VAT registration threshold | For non-resident suppliers: BWP 500,000 (approx. USD 37,250) of taxable remote services supplied to Botswan |
| Tax invoice | Yes. A registered supplier of remote services must issue an invoice or receipt containing the prescribed particulars. There is currently no e-invoicing (electronic fiscal device) obligation imposed on non-resident remote service suppliers. |
Services in scope
- For the purposes of the definition of “remote services” as provided in the Act, the following services shall be remote services provided the location requirement in the definition is satisfied —
- An online supply of e-books, music, games, apps, software, software maintenance, gambling services, streaming television shows, films, podcasts and any form of digital content
- Electronic data management services including website hosting, online data warehousing file-sharing and cloud storage services
- Webinars or distance learning courses
- Website design or publishing services
- Professional services, such as legal, accounting, and consultancy services, that are provided remotely
- Any of the above services provided through an electronic marketplace
- Any other service that satisfies the location requirement in the definition of “remote services” in section 2 of the Act
- A supply of an inbound tourism product shall not be a remote service.
Registration and compliance
Who must register:
A non-resident supplier of remote services must register for VAT where the value of taxable remote services supplied to Botswana exceeds, or is expected to exceed, BWP 500,000 (approx. USD 37,250) at the end of, or at the beginning of, any period of 12 months or a lesser period (section 13 of the VAT Act, 2026). Where remote services are supplied through an electronic marketplace, the marketplace operator is deemed to be the supplier and carries the registration and compliance obligations.
A supplier is not required to register where it supplies remote services solely and exclusively to registered persons, government entities, and large unregistered persons, as those recipients account for the VAT under the reverse charge mechanism.
How to register:
Registration is made through online lodgement of the form approved by the Commissioner General. The supplier must provide, among other details: its name and trading name; address, phone, and electronic contact details; the compliance responsible person; the website/URL used for the taxable activity; its foreign tax identification number; and certified copies of its incorporation/registration and tax certificates, translated into English where applicable.
A non-resident supplier or electronic marketplace operator may also be required to appoint a VAT representative, but this is not mandatory.
Filing and payment
Non-resident suppliers of remote services are required to file quarterly VAT returns for periods ending 31 March, 30 June, 30 September and 31 December. Returns must be lodged and any VAT due paid within 28 days after the end of the relevant quarter.
Key timelines
- Registration of non-resident remote service suppliers commenced on 1 June 2026;
- The obligation to charge and remit VAT commenced on 1 October 2026 (BURS’s Public Notice of 29 May 2026);
- The first tax period is October to December 2026, with the first return and payment due by 28 January 2027.
Invoicing
- Non-resident suppliers of remote services must issue an invoice or receipt containing the prescribed supplier, customer, service, and VAT information.
- There is currently no specific requirement for non-resident remote service suppliers to issue invoices through Botswana's electronic billing (EFD/e-invoicing) system. The electronic billing system is scheduled to commence in early 2027.
- Invoices may be issued in any foreign currency. With the approval of the Commissioner General, remote service suppliers may report and pay VAT in USD, EUR, GBP, or another approved foreign currency.
- While the legislation does not prescribe a specific invoice language, documents submitted to BURS that are not in English must be translated into English. In practice, invoices and supporting records should be capable of being provided in English upon request.
- VAT records and supporting documentation may be maintained outside Botswana but must be made available to the Commissioner General upon written request.
VAT on costs
Non-resident suppliers are not entitled to recover VAT incurred in Botswana.
Other considerations
Platform liability - An electronic marketplace operator can be deemed to be the supplier and is then responsible for VAT registration and compliance.
Botswana does not levy a Digital Services Tax or Significant Economic Presence tax on non-resident suppliers of remote/digital services. However, certain payments (e.g. royalties, technical fees sourced in Botswana) may fall within the withholding tax (WHT) mechanism and be subject to Botswana WHT, subject to any Double Taxation Agreement (DTA) relief.
Penalties
Late-payment interest of 1.5% applies for each month (or part thereof) during which tax remains unpaid. A transitional waiver of late-payment penalties applies for 12 months from commencement of the Tax Administration Act, although interest and assessment/audit risk remain.
VAT on cryptocurrency/digital assets
The VAT legislation does not specifically address cryptocurrency or digital assets. As a result, general VAT provisions apply, and VAT is not expected to arise on the mere holding or exchange of cryptocurrencies. However, VAT may apply to the underlying supply of taxable goods or services where cryptocurrency is used as a form of payment.
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