In July of 2016 South African Revenue Services (SARS) issued a draft notice in terms of Section 29 of the Tax Administration Act.

The draft notice sets out additional record keeping requirements for transfer pricing transactions.

SARS have now issued a Public Notice, dated 20 October 2017, setting out the requirements for returns to be submitted as regards Country by Country (CbC) Reporting and Transfer Pricing Local and Master Files.

The Public Notice now makes it clear that where a taxpayers aggregate affected transactions exceed, or are reasonably expected to exceed, R 100 000 000 and that taxpayer is a tax resident of South Africa, that taxpayer is obliged to submit both a Master File and a Local File which meet the requirements as set out in the External Business Requirements Specification on CbC Reporting issued by SARS in September 2017.

This obligation arises for years of assessment commencing on or after 01 October 2016 and filing must be facilitated within twelve months from the last date of the taxpayers financial year end.

This is somewhat different to the initial draft published by SARS which indicated that this requirement would need to be met for years of assessment commencing 01 January 2016, so does provide some relief for taxpayers from a timing perspective.

However an obligation to file does still exist and taxpayers need to consider these requirements as a matter of urgency as the timeframes involved in putting this documentation in place can be significant.

John Jones

Corporate and International Taxation Director, Johannesburg

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