Services rendered directly to VAT registered customers of non-residents can be zero-rated in certain circumstances.
If a vendor supplies goods to a non-resident, but delivers those goods to a VAT registered customer of the non-resident in South Africa, the supply of goods can be zero-rated. This is presumably because the actual exportation of the goods would have resulted in tax at the zero rate, and the South African vendor who is the customer would have imported the same goods, paid the VAT on importation and would have claimed it back from SARS as an input tax credit. Any services related to such a supply of goods to a South African customer of a non-resident would also be zero-rated. The budget proposes that where there is a similar transaction, but which does not involve a supply of goods, that service must also be zero-rated. So if a vendor renders the service to a South African resident who is a vendor, but the supply is made on behalf of a non-resident, the supply will also be zero-rated.