On June 1, 2026, the previously adopted VAT amendment Act came into effect, introducing significant VAT changes for both domestic and foreign taxable persons, including foreign digital service providers. The Botswana Unified Revenue Service also published a notice further clarifying VAT rules for foreign digital service providers, specifying key dates and transitional provisions.

Key VAT Rules For Foreign Digital Service Providers

Under the newly introduced VAT rules, those who provide digital services remotely must complete a VAT registration form and provide key business and compliance information. The required information includes the provider’s registered name, trade name, address, telephone number, electronic contact details, and the contact details of the individual responsible for VAT compliance. Providers must also disclose the website or online platform through which taxable remote services are provided.

All required data must be supported by certified copies of corporate and tax documentation, such as the company’s incorporation certificate or business registration number issued in the jurisdiction where the business is established. Once registered, foreign providers must begin charging VAT within four months from the date of registration. This means that the requirement to collect VAT begins on October 1, 2026. VAT must be reported and paid quarterly by the 25th day of the month following the end of the relevant tax period.

Providers who fail to meet registration and other VAT requirements may face a penalty equal to 75% of the tax payable for the relevant period if the non-compliance is deliberate. If the failure is not deliberate, the penalty is reduced to 20% of the tax payable for the period in which the non-compliance occurred. Where no VAT is due, but a provider has failed to register, a fixed penalty of BWP 10,000 (approximately USD 745) applies instead.

Foreign digital service providers may appoint a representative to fulfill their VAT obligations on their behalf. Representatives are required to submit VAT returns and make VAT payments to the Tax Authorities, supported by a formal letter of appointment. Additionally, they are responsible for carrying out all VAT compliance obligations imposed on the remote service providers.

Conclusion

Although mandatory VAT registration for foreign digital service providers came into effect on June 1, it applies only to those whose annual supplies exceed BWP 500,000 (approximately USD 37,500). Accordingly, the primary step for affected businesses is to determine whether they provide digital services in Botswana and whether they meet or exceed the registration threshold.