Accounting insight: The South African Revenue Service (SARS) has expanded its Global Minimum Tax (GMT) administration for affected multinational enterprise (MNE) groups. The update goes beyond registration and filing, covering international information exchange, local declarations, payment processing, assessments, refunds and compliance management. Businesses should now confirm whether their South African entities have additional local obligations, even where a foreign group company submits the main information.

SARS’s update is particularly relevant to South African companies that form part of an MNE group with consolidated annual revenue of at least EUR 750 million in at least two of the four preceding fiscal years. South Africa’s GMT framework applies a 15% multinational top-up tax to qualifying groups, subject to the legislation and applicable rules. SARS’s Global Minimum Tax guidance explains the expanded administration and the actions expected from affected taxpayers.

What has changed?

SARS says it can now receive GMT information submitted in another jurisdiction and exchange information with participating tax administrations. This means local taxpayers may need to reconcile information held by SARS with information submitted by a foreign filing entity or exchanged internationally.

SARS has also introduced the GMT03 declaration process. Where a foreign entity files GMT information on behalf of a South African entity, the South African entity may still need to submit a GMT03 declaration to support local administration and payment requirements. The process can allow SARS to recognise exchanged information, generate a South African GMT Payment Reference Number (PRN), administer local liabilities and support payment processing.

Who is affected?

The development is aimed at affected MNE groups and their South African domestic constituent entities. It may involve a local subsidiary, branch or other South African entity that is not responsible for the group’s main filing but still has notification, declaration, payment or record-keeping responsibilities.

Local finance teams should not assume that an overseas group submission removes every South African requirement. SARS may issue validation correspondence, requests for correction, assessments, penalty notices or other communications where submitted information differs from information received through international exchange mechanisms.

What businesses should check

  • Group scope: Confirm whether the group falls within the GMT rules and identify the South African entities included in the group structure.
  • Filing responsibility: Document whether the relevant information is filed locally, by a foreign entity or through a combination of local and foreign processes.
  • GMT03 applicability: Ask whether a South African declaration is required where a foreign filing entity submits the main GMT information.
  • Data consistency: Reconcile legal names, tax reference numbers, fiscal year-ends, ownership details and reporting responsibilities across group systems.
  • Payment controls: Ensure the correct GMT PRN is used for any payment so that SARS can allocate it accurately.
  • Correspondence monitoring: Assign responsibility for reviewing SARS validation letters, assessments, correction requests and penalty notices.

Practical next steps

South African entities in affected groups should prepare a short GMT responsibility map showing the local entity, nominated filing entity, reporting jurisdiction, fiscal year-end, submission route and payment owner. The finance team should also retain evidence of group communications and reconciliations in case SARS requests clarification.

GMT obligations are specialised and depend on the group’s structure, revenue and reporting arrangements. Businesses should obtain advice based on their specific facts and monitor further SARS guidance as technical instructions develop. For broader support with tax compliance and financial administration, explore Your Financial Partner’s accounting and advisory services.