Antonia Nicoloudakis - Head of International Tax | PKF Octagon

Introduction

Global Minimum Tax (“GMT”) was recently introduced in South Africa with retrospective application to tax years starting from 1 January 2024.  

The purpose of this introduction was to align South Africa with the Organisation for Economic Co-operation and Development (“OECD”) introduction of Global Anti-Base Erosion (“GloBE”) Model Rules under the Pillar Two initiative and enable South Africa to impose a multinational top-up tax at a rate of 15% on the excess profits of in-scope Multinational Entities (“MNE”) Groups. 

On 12 September 2025, the South African Revenue Service (“SARS”) issued its first guidance on the GMT compliance and filing requirements. SARS issued the notice on their website that a dedicated project team, including IT specialists and system engineers, have been appointed to integrate the GMT compliance procedures and forms into the existing eFiling system.

Who does this apply to?

The rules apply to large Multinational Enterprises (“MNE”) Groups with global consolidated annual revenues in at least two of the four preceding fiscal years equal to or exceeding EUR 750 million.

This includes both South African-headquartered groups and foreign-headquartered groups with subsidiaries, branches, or joint ventures in South Africa.

South African companies or branches that are part of an in-scope MNE are considered Domestic Constituent Entities (“DCEs”). DCEs must comply with the global minimum tax rules.

Compliance Requirements

A DCE of an in-scope MNE Group must register with SARS for GMT as well as submit a GloBE Information Return (“GIR”) with SARS in the prescribed form and format by the prescribed due date, under the GMT legislation.

SARS has also permitted that where one or more South African DCE is required to file a GIR, each of the South African DCEs may appoint a “designated local entity” that will file on the group’s behalf. The DCEs must submit a notice to SARS of the elected “designated local entity” by no later than six months prior to the filing due date of the GIR.

Filing dates

First Filing of GIR: No later than 18 months after the end of the first reportable fiscal year.

Subsequent Filing of GIR: Must take place no later than 15 months after the end of the second and following reportable fiscal years.

SARS issued a public notice on 28 October 2025 in terms of Notice 6763, that “following comprehensive reviews and project assessments” the GloBE registration and notification functionality on eFiling has been rescheduled from December 2025 to 16 March 2026.

Summary

The introduction of GMT is expected to impact various industries and sector with significant cross-border operations, in particular industries such as digital, technology, pharmaceuticals, and finance.

Penalties

The GMTA Act sets out the penalties for non-compliance to be imposed under section 210 and section 211 of the Tax Administration Act which is as follows:

• Failure to submit the GIR

  o   R50,000 per month

• Failure to submit the GIR which results in unpaid Top-up Tax exceeding:

  • R5 million: The penalty doubles to R100,000 per month
  • R10 million: The penalty triples to R150,000 per month