The draft legislation on the APA programme was later released in July 2023 through the Tax Administration Laws Amendment Bill, 2023. This bill includes a clause indicating that a chapter will be inserted in the Income Tax Act 58 of 1962 on the APA programme.
The draft legislation covers the following among others:
- Definitions of various terms related to APA’s and not included in the Act,
- Provides requirements of persons who would be eligible to apply for the programme
- Outlines fees payable by the applicant as well as fees associated with the APA application,
- Compliance procedures associated with approved APAs,
- Extension of approved APAs, and
- APA termination procedure.
The draft legislation's objective
Based on the draft legislation's objective, it is evident that the chapter aims to enhance tax certainty regarding an 'affected transaction' as defined in section 31 of the Act. Additionally, it addresses the prevention of double taxation and the procedures for resolving associated disputes (TALAB, 2023). However, the chapter lacks sufficient guidance on the eligibility criteria for the program.
SARS plans to launch an Advance Pricing Agreement Programme
SARS plans to launch an Advance Pricing Agreement Programme, starting with bilateral applications. They will learn from other jurisdictions and expand to include multilateral applications. It will be interesting to see how SARS treats these agreements, whether like Binding Private Rulings specific to the applicant or Binding General Rulings that apply to all taxpayers.
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