Merging of Municipalities


As a consequence of Local Government Elections in South Africa, it may occur that Municipalities become disestablished, they merge with other Municipalities and in some instances new Municipalities may be formed. Some of the tax considerations that arise out of it:

  • VAT and PAYE tax reference numbers where municipalities have ceased to exist or merged with other municipalities will need to be deregistered with SARS;
  • Registered Particulars of municipalities will need to be updated to reflect new names, new representative employer and contact details;
  • Where new municipalities are being formed, VAT and PAYE numbers will need to be applied for (in this instance the date of succession of the new municipality as set out in the Government Gazette giving rise to that municipality will guide the date of registration with SARS);
  • Existing tax debts, credits or unallocated amounts on all tax types (i.e. PAYE, UIF, SDL and VAT), VAT refunds, objections to assessments, and audits in progress will need to be dealt with. In this instance, the municipalities into which such municipalities have been absorbed, will be required to take responsibility for working with SARS to close off on all outstanding tax matters;
  • In terms of the Provincial Gazettes, municipalities should be mindful of the legal effect of succession. i.e. they will take over all responsibilities and obligations concerning the assets and liabilities, including the liability to account for any VAT in connection with transactions relating to the disestablished  municipalities.
    • The Binding general ruling (VAT) 39 outlines the VAT treatment of the transfer of any assets, liabilities, rights and obligations in line with the merger, creation and disestablishment of municipalities as a result of any municipal boundary change.

SARS would like to encourage municipalities that are affected by the changes outlined to make contact with their local SARS office to start the process of registration/deregistration as required.  

Top Tip: When you visit SARS offices you need to bring supporting documents.   For more information and to check whether you need to register or not, you can send an email to SARS on [email protected].

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