The Botswana Unified Revenue Service (BURS) published a guidance note explaining the rules for VAT on reverse-charged supplies. The guidance is intended for VAT-registered persons, government entities, and large businesses that are not VAT-registered, and explains their obligations to charge, report, and remit VAT when the reverse-charge mechanism applies.
Key Definitions and Requirements
The BURS clarified that the reverse-charge requirements were originally introduced under the 2025 VAT Amendments. However, that legislation was repealed and replaced by the 2026 VAT Law, which came into force on July 1, 2026.
In the latest guidance, the BURS explained that Large Unregistered Persons (URPs) are individuals, institutions, or businesses that make supplies with a total annual value exceeding BWP 1 million (around USD 70,000) but are not normally registered for VAT. They mainly deal with exempt supplies, meaning their activities do not ordinarily require VAT registration.
Additionally, the BURS explained that remote services are services supplied by a supplier located outside Botswana to a recipient in Botswana where, at the time of supply, there is no connection between the physical location where the supplier performs the service and the recipient's location. A typical example is a music streaming service supplied by a company in another country through an app to a customer in Botswana.
Under the reverse-charge rules, VAT-registered persons liable for VAT on a reverse-charged supply must issue a recipient-created tax invoice when the supply is made. In practice, this means that instead of the foreign supplier issuing the VAT invoice, the recipient prepares the tax invoice and accounts for the VAT. For remote services supplied by non-resident providers, a VAT-registered recipient must notify the foreign supplier in writing that it is VAT registered.
Government entities and URPs must submit a VAT return to the Commissioner General within 28 days after the end of each two-month tax period. They are assigned to either Category A or Category B tax periods. VAT-registered persons do not need to file a separate return for reverse-charged supplies. Instead, they report these transactions through their normal VAT return, which has been modified to accommodate reverse-charged supplies.
Remote services received before August 2026 must be reported using the existing Declaration of Value Added Tax Due on Imported Service. Supplies received from August 2026 onward fall under the new reverse-charge reporting system.
Conclusion
The guidance clarifies invoicing, notification, and filing requirements for both registered and large unregistered entities. Businesses receiving remote services from abroad should check which reporting route applies to their transactions.
