- New VAT zero-rating rules were introduced for qualifying testing services, including clinical trials, supplied by South African vendors to non-resident clients.
- These services can now be zero-rated under section 11(2)(z), even where goods are used in providing the testing services.
- Consumable goods supplied in the course of those testing services may also be zero-rated under section 11(1)(x) if they become unusable or have no commercial value as a direct result of being used and are necessary for the service.
- The change addresses the previous position where VAT could not be zero-rated under section 11(2)(l), making VAT a cost to the non-resident in certain cross-border trial arrangements.
- The amendments are intended to improve the competitiveness of South African service providers and prevent VAT from becoming an embedded cost in qualifying international testing work.
Source: sars.gov.za
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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