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Is Vat charged on services supplied to non-residents?

Generally, services supplied to non-residents are zero-rated in terms of section 11(2)(l) of the Value-Added Tax Act, No. 89 of 1991.

Services supplied to non-residents are not zero-rated in the following circumstances:

  • Services rendered in connection to fixed property situated in South Africa.
  • The services are supplied directly in connection with movable property (excluding debt securities, equity securities or participatory securities) situated within South Africa at the time the service is rendered, unless the movable property is exported to the non-resident subsequent to the supply of the services (section 11(2)(l)(ii)(aa)), or the movable property forms part of a supply by the non-resident to a registered vendor and the services are supplied to the non-resident for purposes of the supply to the registered vendor (section 11(2)(l)(ii)(bb)).
  • Services are supplied directly to the non-resident and he/she is in South Africa at the time of the rendering thereof.
  • Services entail the acceptance by any person to refrain from carrying on an enterprise in South Africa.

 Section 11(3) lists which documents need to be kept by a person rendering these services.

Click here to view SARS Interpretation Note 31 (Issue 3) relating to zero rated transactions, as well as the required documents.

For assistance or more information please contact:

Henno Bothma, Abrahams & Gross Attorneys

T: 021 422 1323     E: info@abgross.co.za

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