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The South African Revenue Service (SARS) has published guidance on South Africa’s new Advance Pricing Agreement (APA) pilot programme, which opened for participation from 1 September 2026.
An APA allows the transfer pricing methodology for specified cross-border related-party transactions to be agreed in advance. The programme is intended to provide greater tax certainty and reduce the risk of double taxation and subsequent transfer pricing disputes.
Who is eligible?
During the pilot phase, SARS will only consider bilateral APA’s involving a double taxation agreement partner. Eligibility is currently limited to South African resident taxpayers that are tax compliant and whose standalone turnover exceeded R10 billion in the preceding year of assessment.
The pilot applies to:
- Distribution and manufacturing transactions exceeding R1 billion per year; and
- Intra-group services exceeding R300 million per year.
Financial assistance transactions and transactions involving the creation of intangible property are excluded.
What does the process involve?
Taxpayers must first participate in a pre-application consultation with SARS. Where the matter is considered suitable, SARS may invite the taxpayer to submit a formal APA application and will engage with the competent authority of the relevant treaty partner.
The pre-application consultation carries a fee of R100,000, while processing a formal APA application attracts a R1 million cost-recovery fee. Once concluded or extended, an annual maintenance fee of R100,000 applies.
An APA may cover up to five future years of assessment and, subject to specified requirements, SARS may permit a rollback of up to three earlier years.
Why does this matter?
The introduction of the APA programme is a significant development in South Africa’s transfer pricing landscape. Although the initial thresholds restrict the pilot to relatively large transactions and taxpayers, eligible multinational groups now have a formal mechanism through which to seek advance certainty on significant cross-border transfer pricing arrangements.
For groups considering an APA, early assessment of eligibility, transaction suitability, transfer pricing methodology and supporting documentation will be important before entering the SARS pre-application process.
RSM can assist multinational groups in assessing whether an APA is appropriate, preparing for the pre-application consultation and supporting the APA process with SARS.
