SARS – Draft APA notice for public comment
Introduction and background
The South African Revenue Service (“SARS”) first released a discussion paper on the proposed Advance Pricing Agreement (“APA”) programme for public comment in November 2020 (“Discussion Paper”), followed by the publication of a high-level model and draft legislation in December 2021. The recent proposed legislation issued in April 2026 now aims to establish the enabling framework for the APA programme, with stakeholders invited to submit public comments by 29 May 2026.
The purpose of this document is to set out the comments, observations, and queries of Graphene Economics (Pty) Ltd (“Graphene Economics”) in relation to the draft notices (accompanying Schedules) issued by SARS under the proposed sections 76C, 76D, 76I(b), 76J(1), 76J(3), and 76P of the Income Tax Act of 1962 (“ITA”).
This document sets out the observations of Graphene Economics and shall serve as a good-faith contribution to the public consultation process undertaken by SARS. The comments and queries contained herein are intended to support the development of a transparent, efficient, and internationally aligned APA framework that balances administrative practicality with taxpayer certainty and accessibility.
Furthermore, this submission seeks to highlight areas where additional clarification, guidance, or procedural safeguards may assist in reducing uncertainty and improving the practical administration of the APA programme. Consideration has also been given to international practices and the approaches adopted in comparable jurisdictions, particularly within the African context, where relevant.
We thank you for the opportunity to engage in this process and it is hoped that these comments will contribute positively toward the establishment of a robust APA system that promotes tax certainty, encourages voluntary compliance, and enhances investor confidence for the South African economy.
Executive summary of recommendations
In summary, Graphene Economics supports the introduction of the APA programme and considers it a significant step toward enhancing tax certainty in South Africa. To strengthen the effectiveness and accessibility of the pilot framework, it is recommended that SARS consider the following key refinements:
- clarify whether the turnover threshold applies at South African entity level or group level and, if necessary, reduce the threshold materially or confirm that it is limited to the pilot phase;
- provide a roadmap or indicative timeline for the future introduction of unilateral APAs;
- expand the scope of covered transactions to include outbound services, certain agency arrangements, and financial transactions where they meet appropriate materiality and suitability criteria;
- clarify the meaning of “distribution” for digital, software, media and other intangible-enabled business models;
- ensure that rejection decisions are accompanied by reasons and that clear safeguards exist between the APA and audit functions;
- provide clearer guidance on the distinction between pre-application, application, cost-recovery and ancillary fees, and reconsider the level of the proposed R1 million cost-recovery fee and annual maintenance fee;
- publish indicative service standards or timelines for key stages of the APA process to support planning and certainty;
- clarify the treatment of critical assumptions, changes in facts, revision or cancellation triggers, and the availability of rollback where appropriate; and
- commit to issuing further guidance, practice notes or FAQs following the pilot phase to support consistent implementation and taxpayer understanding.