The removal of the bona fide inadvertent error defence and what it means for taxpayers On 1 April 2026, the Tax Administration Laws Amendment Act 4 of 2026 came into effect, introducing material changes to the understatement penalty regime administered by the South African Revenue Service (SARS). For taxpayers and their advisors, one consequence of…
Offshore Structures It is one of the most common statements heard in tax advisory. “I want to set up something offshore.” What is often meant by that statement is simple:“I want to pay less tax — ideally none.” What is often understood is something very different. The reality is that offshore structures are not a…
Understanding the Proposal in the 2026 South African Budget The 2026 South African Budget has sparked widespread discussion around the possibility of a new tax on gambling, particularly online gambling. Unsurprisingly, many people immediately assumed this meant that SARS will start taxing gambling winnings. However, the reality is somewhat different. The Current Position: Gambling Winnings…
South Africa Doubles the Annual Discretionary Allowance — What This Means for Individuals Moving Money Offshore In the 2026 National Budget Speech delivered yesterday, the Minister of Finance announced a significant relaxation of South Africa’s exchange control framework for individuals: the annual discretionary allowance available to natural persons has been increased from R1 million to…
Living Abroad for 18 Months – Are You Tax Resident in Two Countries? A very common belief in international tax is that once a person leaves their home country and lives somewhere else for long enough, their original tax residency simply stops. In practice, tax residency almost never works that way. Moving abroad for a…
A SARS “Non-Resident” Letter Does Not Mean You Are Still a Non-Resident A growing number of South Africans abroad — and particularly those returning home — rely on a document from SARS that records them as a “non-resident” and assume it protects their tax position for years to come.The common belief is simple: once SARS…
What the 2026 Amendment Means for You 1. What Section 20A Does Section 20A of the Income Tax Act 58 of 1962 prevents individuals from using repeated losses from certain “suspect” or hobby-type trades to reduce their overall taxable income. If your taxable income (before losses) places you in the top marginal bracket (45 %),…
Many taxpayers genuinely believe that SARS is out to get them — and to be fair, it’s not a completely irrational feeling. The tone of their letters can be intimidating, the deadlines unrealistic, and the system often feels one-sided. You file diligently, pay on time, and suddenly a verification notice or penalty lands in your…
1. Understanding the Current Law Under the Tax Administration Act, 2011 (TAA), SARS may impose an understatement penalty (USP) whenever a taxpayer makes an error or omission that results in a shortfall of tax.The penalty percentage depends on the taxpayer’s behaviour — ranging from 0% (for a bona fide inadvertent error) to 200% (for intentional…
The South African Revenue Service (SARS) has made it clear that no income stream is too new or too informal to escape the tax net. One of its latest compliance focus areas is social media influencers and digital entrepreneurs — individuals earning income through platforms such as Instagram, TikTok, YouTube, and other online channels. With…