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SARS: Draft Notice - Incidences of non-compliance
- 03 July 2025
- Tax
- South African Accounting Academy
Summary:
SARS has issued a draft Notice on incidences of non-compliance by a person in terms of section 210(2) of the Tax Administration Act (TAA) for public comment.
Article:
Section 210(2) of Chapter 15 of the TA Act provides that non-compliance is failure to comply with an obligation that is imposed by or under a tax Act (including secondary legislation issued under these Acts) and is listed in a public notice issued by the Commissioner. This means that where SARS is satisfied that non-compliance by a person referred to in section 210(2) read with the public notice exists, SARS must impose the appropriate administrative non-compliance penalty in accordance with section 211 of the Act.
Contents of the Draft Notice:
- General
- Incidences subject to fixed amount penalty
This notice repeals Notice No. 193, published in Government Gazette No. 40660 of 3 March 2017, with effect from the date of publication of this notice.
Comments had to be sent to SARS by 27 June 2025 prior to publication in the Government Gazette.
The current Common Reporting Standard (CRS) penalty notice requires SARS to first give prior notice to defaulting Financial Institutions (FIs) of non-compliance with a due diligence requirement when detected by SARS, subsequent to which the FIs has 60 business days to remedy the non-compliance failing which the administrative penalty will be imposed.
The intention underlying the new penalty notice is to achieve this by removing the prior notice and remedial period in order to ensure that administrative non-compliance penalties will be imposed upon default, similar to the framework for the imposition of most other administrative penalties under the TAA, whilst still allowing for remittance requests or objection and appeal.
A 2-page Explanatory Note to this Draft Notice is available at
Click here to download the 3-page Draft Notice:
Relevance to Auditors, Independent Reviewers & Accountants:
- The Income Tax Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor, independent reviewer, an accountant or tax practitioner, you need to be aware of the proposed changes to tax legislation that is brought about by the publication of Notices issued by SARS.
- You might need to advise your clients accordingly, if they are a trust that needs to submit third party returns, because your clients need to comply with the latest legislation.
Relevance to Your clients:
- An entity (company or close corporation) has a duty to comply with the Income Tax Act, and directors have to fulfil their duties accordingly, otherwise they could be held liable.
- It is important to be aware of the proposed changes to tax legislation that is brought about by the publication of Notices issued by SARS.