For years South Africa was one of the few major economies without an advance pricing agreement (APA) programme. That changed in 2026. SARS opened its APA pilot programme to applications from 1 September 2026, giving qualifying multinational groups a way to agree their transfer pricing with SARS, and with a treaty partner, before the transactions take place.
Key points
- An APA is a binding agreement on the transfer pricing method and key assumptions for specified cross-border transactions for an agreed period.
- The APA legislation took effect on 22 December 2023, and SARS issued the public notices and an external guide on 7 August 2026.
- The pilot phase began on 1 September 2026 and focuses on bilateral APAs under double tax agreements.
- Eligibility is limited to large taxpayers with qualifying distribution, manufacturing or intra-group services transactions.
What is an advance pricing agreement?
An APA confirms, in advance, the transfer pricing approach that will apply to specific related-party transactions over a set number of years. A bilateral APA involves SARS and the tax authority of the other country, which reduces the risk of double taxation. In exchange for certainty, the taxpayer agrees to apply the agreed method, meet the critical assumptions and report annually on compliance.
Who qualifies for the SARS APA pilot?
According to SARS’s APA implementation page, the pilot is open to tax-compliant South African tax residents that meet the following conditions:
- A standalone turnover of more than R10 billion in the year of assessment before the year in which the application process starts
- Covered transactions limited to distribution, manufacturing or intra-group services
- An expected transaction value for each covered year above R1 billion for distribution or manufacturing, or above R300 million for intra-group services
Financial assistance transactions, such as intra-group loans, and transactions involving intellectual property are excluded during the pilot. Fees are prescribed in a separate public notice, and SARS’s draft proposals pointed to a significant minimum cost, so the programme is aimed at large, recurring transactions.
How the process works
- Pre-application consultation: the taxpayer completes the APA pre-application form and meets SARS to discuss the proposed transactions and approach.
- Formal application: a detailed application sets out the transactions, functional analysis, proposed method, comparables and critical assumptions.
- Evaluation and negotiation: SARS reviews the application and, for a bilateral APA, negotiates with the treaty partner’s tax authority.
- Agreement and annual reporting: once concluded, the taxpayer files annual compliance reports and keeps the prescribed records. The APA can later be renewed or, in defined cases, terminated.
Is an APA right for your group?
An APA makes most sense where the transactions are large, recurring and likely to be questioned, and where double taxation would be costly. It is less suitable where the business model is changing quickly, because the critical assumptions may not hold. For most groups, strong annual documentation and a clear policy remain the foundation. The APA builds on that work rather than replacing it.
Even groups that do not qualify can learn from the programme: SARS’s emphasis on functional analysis, comparables and critical assumptions mirrors what it looks for in an audit. Our SARS transfer pricing audit guide explains how those same elements are tested when there is no APA.
If you are considering an APA, or want to strengthen your position without one, Impact can assess your transactions and help prepare the analysis. Learn more about our transfer pricing dispute and certainty support.
Frequently asked questions
Can a South African company apply for a unilateral APA?
The pilot phase is focused on bilateral APAs under double tax agreements. Check the current SARS notices and external guide before planning an application.
Are intra-group loans covered?
No. Financial assistance transactions are excluded from the pilot. Loans continue to be governed by section 31 and SARS Interpretation Note 127.
Where can I find the official rules?
SARS publishes the public notices, application forms and the APA external guide on its Guide to Advance Pricing Agreements page.
