South Africa: Discussion paper on APAs

South Africa: Discussion paper on APAs

The South African Revenue Service (SARS) released a discussion paper on advance pricing agreements (APAs). Currently, APAs are not available in South Africa as a solution to address transfer pricing issues.


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Read the SARS APA discussion paper [PDF 290 KB]. The due date for comments is 18 December 2020.

Status of APAs in South Africa

Historically, South Africa’s transfer pricing regime has not allowed for APAs. To date, SARS has not offered tax rulings on transfer pricing (unlike many other countries that apply transfer pricing rules in line with the OECD guidance and that offer APAs).

The Davis Tax Committee recommended the introduction of an APA program in South Africa and presented various suggestions regarding how an APA regime could be implemented. 

KPMG observation

Across Africa, APA programs (if implemented) are viewed by some tax professionals as not yet being successful. Also, given capacity constraints and the cost of implementing an APA program, opposition to APAs by South Africa’s tax authority was probably understandable. However, given the current economic climate and the importance of transfer pricing for international trade, the need to find reliable and consistent methods to address uncertainty is viewed as critical if South Africa intends to increase foreign trade and investment. Observers believe it will be important for South Africa to introduce an effective APA program as a matter of priority, and the opportunity to allow stakeholders to provide comments to the discussion paper is seen as demonstrating such good intentions.

Read a November 2020 report [PDF 125 KB] prepared by the KPMG member firm in South Africa

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