Understatement Penalties in South Africa: What Changed on 1 April 2026?
A practical training session on understatement penalties before and after 1 April 2026, covering the impact of the Coronation and Thistle cases, the BFIE amendment, and what the new rules mean for taxpayers and advisers.
BASF South Africa (Pty) Ltd v CSARS
BASF South Africa (Pty) Ltd v CSARS confirms that SARS may not amend a Rule 31 statement to introduce a new legal or factual case, while a taxpayer may raise fresh Rule 32 appeal grounds where they relate to the same disputed assessment amount already objected to.
SARS v Taxpayer 3C (VAT 12167)
In SARS v Taxpayer 3C (VAT 12167, 2026), the Tax Court held that SARS must apply for condonation when filing a Rule 31 statement late, confirming that a taxpayer’s clear communication can constitute valid notice to proceed with an appeal and trigger SARS’s obligations under the Tax Court Rules.
Erasmus vs CSARS
Supreme Court of Appeal dismisses SARS’s appeal in CSARS v Erasmus, holding that SARS could not use a rule 31 statement to revise the factual basis and remedy of a GAAR assessment after issuing the assessment.
Baseline Civil Contractors (Pty) Ltd v CSARS
This judgment underscores the procedural limits in tax litigation, clarifying that taxpayers may not introduce entirely new grounds of appeal that effectively constitute new objections to previously undisputed aspects of an assessment. It reinforces the principles of finality, fairness, and procedural integrity in the objection and appeal process under the Tax Administration Act.
Inhlakanipho Consultants (Pty) Ltd v CSARS
This judgment highlights the binding nature of tax settlement agreements, affirming that SARS must honour lawfully concluded agreements as final and enforceable. It reinforces certainty, fairness, and trust in tax dispute resolution by preventing SARS from deviating from agreed terms after compliance by the taxpayer.
Lutzkie v CSARS ZASCA 11 (2026)
Supreme Court of Appeal dismisses reconsideration in Lutzkie v SARS, holding that no exceptional circumstances justified revisiting refusal of leave to appeal on disputed taxable income and penalties.
Ferreira v Commissioner for SARS ZAGPPHC 47, 2 Feb 2026
“A significant High Court ruling on SARS discretion under the ‘pay now, argue later’ rule, highlighting the importance of rational decision-making, adequate security, and procedural fairness in tax disputes.”
Binding Private Ruling 424 on Section 24J
Binding Private Ruling 424 examines whether interest on a loan used to redeem preference shares and settle related dividends is deductible under section 24J of the Income Tax Act.
VAT Ruling 014 – Input Tax Apportionment
VAT Ruling VR 014 (9 January 2026) approves the page-space and varied turnover-based apportionment methods under sections 17(1) and 41B of the VAT Act.