There has been a great deal of noise about SARS’ trust penalties. On my reading, the real story is both simpler and more significant. SARS has not invented a new penalty. It has extended an old section 210 mechanism to a new class of taxpayer — trusts — at a time when revenue collection and compliance are plainly receiving sustained attention.
The penalty is not new. The target is.
Recent commentary has tended to treat the trust penalty as though SARS suddenly discovered a brand-new weapon. That overstates the position. The legal engine is old. The target is new. That distinction matters because it changes how one reads both the trust notice itself and the 4 May messaging that followed.1
This is not a new penalty. It is a new extension.
Section 210 does not impose a fixed amount penalty for every administrative failure under every tax Act. It does something more structured than that. Section 210(2) says that the relevant non-compliance must be a failure to comply with an obligation imposed by or under a tax Act and it must be listed in a public notice issued by the Commissioner. Once that happens, section 211 supplies the fixed amount table, and section 214 requires the penalty to be imposed by way of a penalty assessment. The purpose of the chapter, in section 209, is to secure the “widest possible compliance” with the tax Acts in an impartial and proportionate way.2
That design matters. It means the correct description of the trust development is not that SARS has created some entirely new penalty out of thin air. The better description is that SARS has decided to bring trusts within an existing fixed-amount administrative penalty regime.
The section 210 story in brief
Seen in context, the trust notice is just the latest step in a much longer pattern. SARS has been widening the section 210 net incrementally for years. The pattern is not subtle. It is phased. It is deliberate. And it works by public notice.
The section 210 rollout, in brief
1 October 2012 — Notice 790 — natural persons with outstanding income tax returns.
3 March 2017 — Notice 193 — OECD Common Reporting Standard / reporting financial institution non-compliance.
11 May 2018 — Notice 480 — non-submission of Country-by-Country, master file and local file returns required under the 2017 notice.
26 October 2018 — Notice 1175 — Diamond Export Levy return non-submission.
14 December 2018 — Notice 1372 — companies with outstanding income tax returns after final demand.
29 October / 26 November 2021 — Notices 1461 and 1531 — revision and widening of the natural-person regime.
27 March 2026 — Notice 7314 — trusts added to the regime.
The chronology matters because it shows the real theme: extension by notice, class by class. Natural persons came first. Reporting financial institutions and related OECD Common Reporting Standard obligations were added later. Companies were brought in after that. The natural-person regime was then revised and widened again in 2021. Trusts are simply the newest entrant.3
Why trusts, and why now?
One should be careful not to reduce every compliance initiative to revenue desperation. SARS is entitled — indeed obliged — to enforce the law. But equally, it would be artificial to ignore the fiscal context in which this trust extension arrives. SARS has been explicit that it accepts responsibility to meet revenue estimates, accelerate collection, focus on debt recovery, and intensify compliance efforts. It has also publicly linked compliance initiatives to improved revenue performance. Against that background, the extension of section 210 to trusts looks less like a doctrinal surprise and more like a practical enforcement choice.4
Put differently, this is more expansion than revolution. The statutory machinery was already there. The decision was to use it against a wider class of taxpayer.
How the trust penalty actually works
Trusts do not get their own special tariff. Once a trust falls within the listed incidence of non-compliance, the amount is determined under the ordinary section 211 penalty table (copied below) by reference to the trust’s assessed loss or taxable income for the preceding year. The penalty is then capable of recurring monthly, at the same level, until the non-compliance is remedied, subject to the statutory limits. Where the preceding year position is unknown, SARS may in some cases work off the lowest band or estimate the taxable income.5
| Assessed loss or taxable income for the preceding year | Monthly penalty |
| Assessed loss | R250 |
| R0 – R250 000 | R250 |
| R250 001 – R500 000 | R500 |
| R500 001 – R1 000 000 | R1 000 |
| R1 000 001 – R5 000 000 | R2 000 |
| R5 000 001 – R10 000 000 | R4 000 |
| R10 000 001 – R50 000 000 | R8 000 |
| Above R50 000 000 | R16 000 |
The numbers can become very real, very quickly, especially if a trust sits in non-compliance for months on end.
A further limit — for now
There is another point in the notice that deserves more attention than it has received. Notice 7314 does not catch every historic trust return. It applies only to a failure to submit a return for years of assessment commencing on or after 1 March 2023. For the ordinary trust cycle, that means the 2024 year of assessment onward. On the face of the notice, SARS cannot rely on Notice 7314 to impose this fixed section 210 penalty for outstanding tax returns for earlier years.
That is not an amnesty for old returns thouhg. The filing obligation remains and SARS may still have other enforcement tools available to it. But it does mean one should be careful about the way the current trust enforcement story is told. The present trust notice is narrower than some commentary suggests.
The historical lesson, however, is not complacency. SARS has already shown with natural persons that a section 210 notice can be widened over time. The original natural-person regime had its own limits. The 2021 revision then introduced a transitional structure: from 1 January 2022, one or more outstanding returns for years commencing on or after 1 March 2020 were enough, while older years still generally required two or more outstanding returns; from 1 December 2022, that transitional protection fell away and one or more outstanding returns for years commencing on or after 1 March 2006 could trigger the penalty. So even if some older trust years sit outside the notice today, trustees should not assume they will remain outside it indefinitely.6
4 May is important, but it is not the whole law
This is, in my view, where the discussion has become too blunt. Notice 7314 does not simply say that every trust with an outstanding return becomes automatically liable on 4 May 2026. The listed incidence of non-compliance is narrower. It is not enough that a trust has an outstanding return within the years covered by the notice. SARS must also have issued that trust with a final demand referring to the notice and requiring the submission of the outstanding return, and the trust must still have failed to submit the return within 21 business days of the date of issue of that final demand.6
That means 4 May is best understood as SARS’ intended first penalty run date — the date from which it says it will start issuing AP34 penalty assessments — not as some universal statutory cliff-edge applicable in exactly the same way to every trust. The notice still requires the prior demand and the 21-business-day window.
There is a further sequencing issue. On 9 February 2026 SARS said it had already issued final demands to trusts for the 2024 and 2025 years of assessment and that the related public notice would follow shortly. The notice itself, however, was only gazetted on 27 March 2026. Then, on 2 April, SARS said penalties would be effective from 4 May, and on 7 April it said the first penalties had been deferred to 4 May and that none would be imposed before then.7
Without seeing the actual final demand in a particular case, one should not overstate the point. There may be case-specific facts or later communications that matter. But one should not ignore the issue either. If SARS chooses to impose a penalty, the preconditions in the notice still need to be satisfied in that particular case. Respectfully, a media release cannot replace the legal requirements of the public notice itself.
Do not panic-file trust returns
None of this is a suggestion that trustees should sit back and do nothing. Quite the opposite. Trustees should take the matter seriously. But seriousness is not the same thing as panic. Trust tax compliance can be technically delicate. Beneficiary allocations, vesting, conduit treatment, attribution rules, the application of section 7C to loan accounts, capital-versus-revenue questions, and historic administration issues can all make a hurried return far more dangerous than people assume.8
A rushed return that gets the fundamentals wrong can create larger downstream problems than the immediate administrative penalty debate — including further adjustments, avoidable disputes, and even understatement penalty exposure if SARS later says the return was materially incorrect. Accuracy still matters.
There is also a practical point for dormant or unwanted trusts. SARS has separately reminded trustees that all registered trusts must file returns, even where there was no economic activity, and that trustees should regularise the trust’s tax affairs with SARS before pursuing termination at the Master and deregistration for income tax. So the sensible message is this: calm down, check what is actually outstanding, regularise the position properly, and where a penalty is wrongly imposed, use the available remission and dispute processes.9
Conclusion
There is no revolution here. There is an expansion. The trust notice is another step in SARS’ long-running use of section 210 public notices to widen the fixed-amount penalty net. That matters because it tells taxpayers something about how SARS is likely to continue operating: by using existing statutory machinery to pull more categories of non-compliance into automated enforcement whenever it can. And even where the present trust notice excludes older years, SARS’ own section 210 history suggests that exclusions of that kind may prove temporary.
But that does not mean trustees should surrender nuance to panic. The law still matters. The wording of the public notice still matters. The sequence of demand, notice and penalty assessment still matters. And for trustees trying to regularise complicated affairs, getting the return right is crucial.
The answer, then, is not complacency and not hysteria. It is disciplined compliance.
Footnotes
1. Notice 7314 in GG 54417 of 27 March 2026; SARS, “Penalties are being implemented for the non-submission of Income Tax Returns by Trusts” (2 April 2026); and SARS, “Implementation Date of Administrative Non-Compliance Penalties for Late- or Non-Submission of ITR12T Income Tax Returns for Trusts” (7 April 2026).
2. Tax Administration Act 28 of 2011, ss 209, 210, 211 and 214.
3. Notice 790 in GG 35733 of 1 October 2012; Notice 193 in GG 40660 of 3 March 2017; Notice 480 in GG 41621 of 11 May 2018; Notice 1175 in GG 41996 of 26 October 2018; Notice 1372 in GG 42100 of 14 December 2018; Notice 1461 in GG 45396 of 29 October 2021; Notice 1531 in GG 45540 of 26 November 2021; and Notice 7314 in GG 54417 of 27 March 2026.
4. SARS, “Media Release – SARS Commits to Improved and Faster Revenue Collection in 2025/26” (21 May 2025); SARS, “Media Release: SARS welcomes the revised revenue estimate for the 2025/26 fiscal year” (25 February 2026); and SARS, “Media Release: SARS crosses historic R2 Trillion mark in Net Revenue Collection in our democracy” (1 April 2026).
5. Tax Administration Act 28 of 2011, s 211.
6. Notice 7314 in GG 54417 of 27 March 2026, Schedule para 2; SARS, “Penalties are being implemented for the non-submission of Income Tax Returns by Trusts” (2 April 2026) (stating that the trust penalty applies to trusts with outstanding ITR12T returns for 2024 onwards); Notice 790 in GG 35733 of 1 October 2012, Schedule para 2.1; and Notice 1531 in GG 45540 of 26 November 2021, Schedule para 2.1 (from 1 January 2022) and para 2.2 (from 1 December 2022).
7. SARS, “Final demand issued for annual income tax returns for Trusts” (9 February 2026); SARS, “Penalties are being implemented for the non-submission of Income Tax Returns by Trusts” (2 April 2026); and SARS, “Implementation Date of Administrative Non-Compliance Penalties for Late- or Non-Submission of ITR12T Income Tax Returns for Trusts” (7 April 2026).
8. SARS itself recognised the complexity of trust tax compliance when, after stakeholder feedback, it deferred the first imposition of trust admin penalties to 4 May 2026: SARS, “Implementation Date of Administrative Non-Compliance Penalties for Late- or Non-Submission of ITR12T Income Tax Returns for Trusts” (7 April 2026).
9. SARS, “Trust Deregistration and Tax Compliance” (9 April 2026); see also SARS, “Guide to submit a dispute via eFiling”, updated guidance reflecting the Request for Remission, objection and appeal processes for administrative penalties, including trust penalties.
This article is intended for general information only and does not constitute tax advice.
