Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

August 1, 2023
2023-1343

South Africa proposes an Advance Pricing Agreement (APA) program

  • Recently proposed legislation would launch an APA program in South Africa.
  • The APA program will likely begin with a pilot program.
  • Potentially affected taxpayers will want to become familiar with the proposal and underlying Tax Administration publications.

The Draft Tax Administration Laws Amendment Bill, 2023 (Draft TALAB) released on 31 July 2023, sets out South Africa's proposed legislation concerning an APA program. This follows the South African Revenue Service (SARS) discussion paper on an APA program released for public comment in November 2020, the release of a high-level model in February 2021 and draft legislation in December 2021.

An APA program will provide taxpayers with a greater level of certainty when embarking on large-scale international transactions that have transfer pricing implications.

The APA framework, currently contained in Clause 10 of the Draft TALAB, deals with matters such as clarifying who is eligible to apply for APAs, how applications are processed, finalization, extension, and termination of APAs, record keeping, and the SARS Commissioner's power to prescribe procedures and guidelines for implementing the program. Importantly, it provides for consultation with affected treaty partners at key points of the process.

It is anticipated that the APA program will commence with a pilot, only accepting bilateral APA applications.

The pilot will allow for learning from other jurisdictions and the managed expansion of capacity before SARS extends the program to cater to, for example, multilateral APA applications.

More detail will follow in a subsequent publication.

———————————————

For additional information with respect to this Alert, please contact the following:

Ernst & Young Advisory Services (Pty) Ltd.

Ernst & Young LLP (United States), Pan African Tax Desk, New York

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more