ENS Tax In Brief

Below, please find issue 176 of ENS’ tax in brief, a snapshot of the latest tax developments in South Africa.

case law

• Tax Court | Taxpayer KG (Pty) Ltd v Commissioner for the South African Revenue Service (IT 46515 and VAT 22578) (4 August 2026)
  • This judgment concerned an interlocutory application by Taxpayer KG (Pty) Ltd (“Taxpayer KG”) for leave to amend its statement of grounds of appeal under Rule 32 of the Tax Court Rules in a dispute concerning the South African Revenue Service’s (“SARS”) disallowance of an input tax deduction of R6.65 million claimed on the acquisition of immovable property.
  • The main issue for determination was whether Taxpayer KG could introduce new factual allegations that the property had been acquired partly to exploit fly-ash deposits and develop a solar electricity project, where those purposes had not been disclosed during the audit, objection or appeal processes.
  • The Tax Court held that the amendment was permissible because the new allegations provided additional factual grounds for challenging the same R6.65 million deduction and did not introduce an objection against a different part or amount of the assessment. It further held that the amendment raised a genuine triable issue and that any prejudice to SARS could be addressed through costs and a postponement.
  • The application was granted. The costs of the application were made costs in the appeal.
  • Find a copy of the judgment here.
• Tax Court | Taxpayer MLC v Commissioner for the South African Revenue Service (IT 77272) (11 August 2026)
  • This judgment concerned an appeal by Taxpayer MLC against understatement penalties imposed by the Commissioner for SARS after fraudulent revised income tax returns for the 2020 and 2021 years of assessment resulted in an undue refund of approximately R1.38 million.
  • The main issue for determination was whether SARS had proved that the taxpayer was responsible for the fraudulent returns and had correctly classified her conduct as intentional tax evasion, justifying an understatement penalty of 150% under sections 222 and 223 of the Tax Administration Act, No. 28 of 2011 (“TAA”). The taxpayer alleged that an unidentified SARS official had submitted the returns using her e-filing details.
  • The Tax Court rejected the taxpayer’s version as a recent fabrication, finding that it was uncorroborated, inconsistent with her earlier explanations and contradicted by her admission that she had knowingly retained part of therefund. It held that SARS had proved intentional tax evasion on a balance of probabilities and that there was no basis to reduce the penalty.
  • The appeal was dismissed with costs.
  • Find a copy of the judgment here.
• Tax Court | Company EG Investments Shareblock (Pty) Ltd and Company LS Investments Shareblock (Pty) Ltd v Commissioner for the South African Revenue Service (IT 77406 & IT 77357) (24 August 2026)
  • This judgment concerned appeals by two share block companies against additional assessments issued by the Commissioner for SARS for the 2023 year of assessment, after SARS treated rental received from third-party commercial tenants as taxable income of the companies and disallowed deductions claimed in respect of distributions to their shareholders.
  • The main issue for determination was whether the rental constituted “gross income” received by or accrued to the companies under section 1 of the Income Tax Act, No. 58 of 1962 (“ITA”), or whether it accrued directly to the shareholders under the relevant share block arrangements, with the companies acting merely as agents or conduits.
  • The Court held that the rental accrued to the companies because they owned the properties, concluded the leases in their own names, received the rental, issued the tax invoices and accounted for value-added tax. The subsequent distribution of the net rental to shareholders did not alter the character of the income or the person to whom it had accrued.
  • The appeals were dismissed with costs, and SARS’ additional assessments of approximately R1.5 million for Company EG and R2.8 million for Company LS were confirmed.
  • Find a copy of the judgment here.
• High Court | Devland Cash and Carry (Pty) Ltd v Commissioner for the South African Revenue Service (5837/2020) [2026] ZAGPJHC 967 (28 August 2026)
  • This judgment concerned an application by Devland Cash and Carry (Pty) Ltd (“Devland”) to compel the Commissioner for SARS to produce a complete record of the impugned decisions in terms of Rule 53 of the Uniform Rules of Court, after SARS declined Devland’s request for suspension of payment of a reassessed tax debt of approximately R1.9 billion (inclusive of penalties and interest) in respect of corporate income tax and value-added tax (“VAT”), pursuant to section 164 of the TAA.
  • The main issue for determination was whether section 68 of the TAA could in principle be invoked by SARS to justify withholding documents that would otherwise form part of the Rule 53 record, with SARS contending that such documents were protected by statutory confidentiality under section 68(1) of the TAA and the mandatory protection provisions of section 35 of the Promotion of Access to Information Act, No. 2 of 2000.
  • The application was granted with costs.
  • Find a copy of the judgment here.

legislation and draft legislation

• VAT Act, No. 89 of 1991 (“VAT Act”) | Amendments to Export Regulations
  • Amendments to the regulations issued in terms of section 74(1), read with paragraph of the definition of “exported” in section 1(1) of the VAT Act, were published in Government Gazette 55245 on 25 August 2026.
  • The amendment is deemed to have come into operation on 1 April 2026.
  • Find a copy of the amended regulations here and a copy of the explanatory memorandum to the amended regulations here.

SARS publications

• Interpretation Notes
  • Interpretation Note 54 (Issue 3) (“IN 54”)
    • SARS has published Issue 3 of IN 54, which considers the meaning and scope of section 23(o) of the ITA relating to deductions not allowed for corrupt activities, fines and penalties, and fruitless and wasteful expenditure.
    • IN 54 (Issue 2) had been archived as of 1 September 2026.
    • Find a copy of IN 54 (Issue 3) here.
  • Interpretation Note 146 (“IN 146”)
    • SARS has published IN 146 (first issue), which considers the meaning of “deemed to be one and the same person” under section 44(3)(a) of the ITA for purposes of determining entitlement to wear-and-tear allowances under sections 11(e) and 12C in the year that an allowance asset is transferred under an amalgamation transaction.
    • Find a copy of IN 146 here.
• Guides
  • Quick Guide: Alternative Dispute Resolution (Issue 2)
    • SARS has published Issue 2 of the Quick Guide: Alternative Dispute Resolution, which provides a practical overview of the objection, appeal and alternative dispute resolution processes for resolving tax disputes with SARS.
    • Find a copy of the guide here.
  • Guide to the Tax Compliance Status (TCS) functionality on eFiling
    • SARS has updated the Guide to the Tax Compliance Status functionality on eFiling to clarify that non-resident directors who make multiple transfers of rental income or director's fees during the year need only submit a single annual Approval for International Transfer (AIT) application, based on the estimated annual value of the relevant income. This follows amendments to the Exchange Control Regulations introduced by the South African Reserve Bank.
    • Find a copy of the updated guide here.

• Common Reporting Standard (“CRS”) | Trade Test Readiness
  • SARS has invited financial institutions and solution providers to participate in the CRS Trade Testing Programme from 1 September 2026 to 18 September 2026.
  • The trade testing programme provides participants with an opportunity to validate their systems, file submissions and business processes against the latest CRS requirements before production submissions commence.
  • Find more information here.

• SMMEs Connect Issue 15 (August 2026)
  • In the 15th edition of SMME Connect, SARS reinforces its commitment to make tax compliance simpler and more accessible for small businesses through education and collaboration.
  • Find a copy of this issue here.
• SARS Employer Interim Reconciliation | September – October 2026
  • SARS has issued a reminder that the Employer Interim Reconciliation submission period runs from 21 September to 31 October 2026, during which all employers must reconcile their PAYE, UIF and SDL declarations for the period 1 March 2026 to 31 August 2026 and submit their EMP501 via eFiling or e@syFile™ Employer. Key changes for 2026 include an updated e@syFile™ Employer build expected in mid-September, a new source code for ITREG to mitigate duplicate income tax registrations, and minor amendments to source code validations.
  • Find a copy of the e@syFile™ Employer User Guide here.
  • Find a copy of the Step-by-Step Guide to the Employer Reconciliation Process here.
• SARS Third-Party Data Bi-Annual Submission | September – October 2026
  • SARS has announced that the Third-Party Data Bi-Annual Submission period is open from 1 September to 31 October 2026. Approved third-party data providers are required to submit taxpayer information for the reporting period ending 31 August 2026.
  • Find more information here.
• China Zero-Tariff Trade Scheme | New Additional Information Code
  • SARS has announced the implementation of the China Zero-Tariff Trade Scheme, which introduces a new Additional Information Code (CHN) that traders must declare in the Additional Information field. SARS will continue to accept manual endorsements, including stamped certificates, for a grace period of 30 business days from the date of publication (being 4 September 2026) while service providers implement the required system changes.
  • Find more information here.

customs and excise

• Customs and Excise Act, No. 91 of 1964 | Tariff amendments
  • Notice R7864
    • The tariff amendments notice, published in Government Gazette No. 55269, relates to the following amendment, with effect from 28 August 2026:
      • Amendment to Part 1 of Schedule No. 1, by the substitution of tariff subheadings 1701.12, 1701.13, 1701.14, 1701.91, and 1701.99, to increase the rate of customs duty on sugar from 483.72c/kg to 697.92c/kg as a consequence to the increase of the Dollar Based Reference Price from US$680/ton to US$785/ton (ITAC Report 781)
    • Find a copy of the notice here.
  • Notice R7865
    • The tariff amendments notice, published in Government Gazette No. 55269, relates to the following amendment, up to and including 27 February 2027:
      • Imposition of provisional payments in relation to anti-dumping duties against the alleged dumping of flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, painted, varnished or coated with plastics, classifiable under tariff subheadings 7210.70.20, 7210.70.30, 7210.70.40 and 7210.70.90 originating in or imported from the Peoples Republic of China (ITAC Report 788)
    • Find a copy of the notice here.
  • Notice R.7874
    • Amendment to Part 3 of Schedule No. 2, by the substitution of various items under item 260.03, in order to include imports originating in or imported from South Korea to be subject to the payment of the safeguard duty of a rate of 11% on certain hot-rolled steel products.
    • The amendment will be effective from 2 May 2025 up to and including 1 May 2027.
    • Find a copy of the notice here.
  • Notice R.7875
    • Amendment to Part 3 of Schedule No. 2, by the substitution of various items under item 260.03, in order to include imports originating in or imported from South Korea to be subject to the payment of the safeguard duty of a rate of 9% on certain hot-rolled steel products,
    • The amendment will be effective from 2 May 2025 up to and including 1 May 2027.
    • Find a copy of the notice here.
  • Notice R.7888
    • Amendment to Part 1 of Schedule No. 2, by the insertion of various items under item 213.03 and 217.02, in order to impose anti-dumping duties on imports of windscreens originating in or imported from Malaysia.
    • The amendment will be effective from 4 September 2026.
    • Find a copy of the notice here.
  • Notice (not yet allocated)
    • Amendment to Part 1 of Schedule No. 2, by the insertion of various items under item 217.02, in order to impose anti-dumping duties windscreens originating in or imported from the People’s Republic of China
    • The amendment will be effective from 7 September 2026.
    • Find a copy of the notice here.

international

• Organisation for Economic Co-operation and Development (“OECD”) | Proposed revisions to Chapter VII of the OECD Transfer Pricing Guidelines
  • The OECD has published the public comments received on the proposed revisions to Chapter VII of the OECD Transfer Pricing Guidelines, which deals with special considerations for intra-group services.
  • The comments will inform discussions at a public consultation meeting scheduled for 9 November 2026.
  • Find a copy of the public comments here.