Value Added Tax (VAT) in South Africa

VAT, short for Value Added Tax, is imposed in South Africa on the supply of goods and services by registered vendors.

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

In this article, we answer some of the frequently asked questions on VAT at a rate of zero percent.

  • What is value-added tax (VAT)?

    Xneelo is a private company registered as a VAT vendor in terms of South African tax legislation. VAT is an indirect tax on the consumption of goods and services within South Africa, and we must legally charge VAT on all services rendered.

    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, are subject to VAT at a rate of zero percent.

  • Do you pay VAT on the services you receive?

    Our default position is to charge VAT at the standard rate in South Africa, which is automatically added to invoices for services rendered. 

    Fees shown on our website for the respective products include VAT. 

    Please note that if xneelo doesn’t charge VAT, you are sometimes still liable to pay applicable regional taxes yourself, based on your country of residence.

    You can update your account details and VAT Number in the xneelo Control Panel.

  • How do I know if I qualify for a zero-rated invoice?

    The supply of zero-rated services applies towards international customers (non-residents for tax purposes) meeting the relevant requirements. 

    To establish whether you are a non-resident for tax purposes: 

    • You should be living outside South Africa’s borders, with some degree of continuity, apart from accidental or temporary absence. 
    • Your company is incorporated, established, or formed or has its place of effective management outside of South Africa.

  • What documents should be submitted if I qualify for a zero-rated invoice?

    As a VAT vendor, we’re required to obtain and retain documentary proof substantiating your entitlement to apply the zero rate to the services we render. This means we need written confirmation from you that:

    • You are not a resident (natural person or company) of South Africa; and
    • Neither you nor any other person directly benefiting from our services is/will be present in South Africa at the time that the services are rendered.

    You may use our example copy and email the declaration to

    Retention of information: All information we collect and process, will be maintained in accordance with the terms set out in our Privacy Policy.

Assist Note

This article is general information and should not be used or relied on as professional advice. Please contact your financial adviser to stay up to date with your tax liabilities. The SARS website also provides up-to-date information on Value Added Tax.