PKF Pretoria

right people right size right solutions



22 Jul 2019

The South African VAT system is destination-based. This means that VAT is levied on the consumption of goods and services within the borders of South Africa. It follows then that goods and services supplied by VAT vendors where consumption takes place outside of South Africa and where benefit is enjoyed outside South Africa, is subject to VAT at a rate of zero per cent.

A question that is often asked is whether the supply of services by VAT vendors to non-residents should be zero rated.

Section 11 (2) (l) of the VAT Act provides that services provided to non-residents should be zero-rated, except where the  service relates to the following ( in which case zero rating will not apply):

  • Land or improvements to land situated in South Africa.
  • Services supplied in connection with movable property which is situated inside South Africa at the time the services are rendered. Except for movable property which :
  1. Is exported to the non-resident after the supply of such services
  2. Forms part and parcel of a supply by the said person to a registered vendor and such services are supplied to the said person for purposes of such supply to the registered vendor.
  • Services rendered to the non-resident if the non-resident is in South Africa at the time the services are rendered.

The services rendered to the non-resident should be tested against all of the above criteria.

It is however important to note that not all three tests indicated above need to be satisfied in order for zero rating not to apply. If any one of the above-mentioned tests is satisfied, then the service to the non-resident will be standard rated at 15%.

Get In Touch

For more information on how we can help you, get in touch

* *


About us


Copyright 2018 PKF Pretoria | PKF Pretoria is a member firm of the PKF South Africa Inc. and PKF International Limited family
of legally independent firms. Neither PKF Pretoria nor PKF South Africa Inc. accept any responsibility or liability
for the actions or inactions on the part of any other individual member or correspondent firm or firms.