Overview
The South African Revenue Service (SARS) is implementing an Advance Pricing Agreement (APA) programme to provide upfront tax certainty for qualifying cross-border related-party transactions. APAs help prevent disputes by confirming, in advance, the transfer-pricing approach that SARS will apply to specified transactions.
An APA is a binding agreement between SARS and a taxpayer that sets out the transfer-pricing method, key assumptions, and terms that will apply to specific international transactions within a multinational group, for an agreed period.
Where an APA applies, SARS and the taxpayer have clarity upfront on how the covered transactions will be assessed for transfer pricing, subject to the agreed terms and ongoing compliance requirements.
At a Glance Summary of what the APA programme is, who it is for, and what to do next | |
What is an APA? | A binding agreement that confirms the transfer-pricing approach that SARS will apply to specific cross-border related-party transactions, in advance. |
Why it matters | Provides upfront certainty, helps prevent disputes, and supports a stable and predictable tax environment. |
Who should consider APAs? | Taxpayers in multinational groups with qualifying cross-border related-party transactions and a need for certainty on transfer pricing. |
Pilot approach | SARS will start with a limited pilot and will accept bilateral APA applications only during the pilot phase. |
When? | Pilot phase planned to start in 2026. |
What to do next | Review the draft public notice and follow the guidance on eligibility, fees, consultations, and application requirements when the pilot opens. |
Why we are doing this
The APA programme aligns with international best practice, including the OECD/G20 BEPS Action 14 recommendations on dispute prevention and resolution, and follows guidance from the Davis Tax Committee. The APA programme supports legitimate trade and provides clarity and certainty for taxpayers about the transfer pricing of qualifying transactions.
The APA programme supports SARS’s strategic intent to provide clarity and certainty to taxpayers and traders on their obligations and to make compliance easier.
By resolving transfer-pricing matters before transactions take place, APAs help prevent disputes and reduce time spent on dispute resolution. This supports SARS’s mandate to improve the tax environment for large businesses and strengthens service delivery through more transparent and predictable processes.
Benefits of the APA programme
Upfront Certainty and Fewer Disputes
- Confirms the agreed transfer-pricing approach for covered transactions, upfront (subject to the APA terms and compliance requirements).
- Reduces the likelihood of disputes by resolving transfer-pricing issues before they escalate.
- Supports more efficient use of resources for taxpayers and SARS by limiting time spent on prolonged audit and dispute processes.
A More Predictable Environment for Investment
APAs contribute to a stable and predictable tax environment. This can support investment decisions by multinational groups and helps SARS facilitate legitimate trade.
Supports Compliance and Modernisation
The APA programme complements SARS’s existing advance-tax-rulings framework by extending upfront certainty to qualifying international transactions. It supports SARS’s modernisation by enabling clearer guidance, earlier engagement, and greater transparency.
Who can apply (pilot phase)
The APA legislation took effect on 22 December 2023. SARS will implement the programme through a pilot phase owing to the specialised and resource-intensive nature of APA cases.
- Suitable applicants: Taxpayers in multinational groups with cross-border related-party transactions and well-defined transfer-pricing positions that can be assessed against the arm’s length principle.
- Pilot limitation: During the pilot, SARS will accept bilateral APA applications only.
- Phased expansion: SARS will use lessons from the pilot gradually to expand capacity and scope.
How the pilot will work
SARS plans to start the pilot phase in 2026. Interested taxpayers will be invited to review the public notices and use the dedicated email channels when the pilot opens.
The draft public notice sets out the pilot requirements and application process, including:
- Eligibility criteria
- Applicable fees
- Pre-application consultations
- Required application content
- Procedures for amending or withdrawing applications
- Criteria for rejecting applications
- Processing protocols
- Finalising APAs
- Annual compliance reporting
- Renewal
- Termination procedures
- Record-keeping requirements.
Adoption of Best Practices
International guidance from the OECD and United Nations notes that new APA programmes should start with a limited number of simpler cases to build experience. In line with this approach, SARS intends to limit the pilot to a small number of applications and to focus on simpler transactions.
Commitment to Responsible Revenue Stewardship
The APA programme reflects SARS’s commitment to responsible stewardship of public revenue. By supporting a stable, transparent, and predictable environment for cross-border investment, the programme strengthens fairness, certainty, and confidence in the tax system.
Useful information
- OECD Forum on Tax Administration: Bilateral Advance Pricing Arrangement Manual
- United Nations: Bilateral Advance Pricing Agreement/Arrangement Programmes – Frequently Asked Questions
Need help?
When the pilot phase begins, taxpayers who intend to apply for an APA may contact the APA Support Team at [email protected].
For other APA-related queries, contact the APA Support Team at [email protected].
