We’re now a quarter of the way into 2026 – hope it has been successful.
Tax issues
EMP 501s
The annual EMP 501 submission period will run from Wednesday, 1 April 2026, until Sunday, 31 May 2026. During this period, the old version of e@syFile will be available, but only to facilitate the viewing of historic data (it is advisable that the old version not be uninstalled and should be kept with backups in a safe place). As such, the new version (version 8.0.1) should be used for submission purposes. To enable taxpayer readiness, SARS will be hosting online training on the new e@syFile application from 10:00 to 13:00 on Tuesday, 7 April 2026, and Tuesday, 5 May 2026. It is not necessary to book in advance, and taxpayers are advised to join whichever session best fits their schedule. To join a session, click this link.
Unpromulgated Changes
With the 2025 Tax Amendments still not promulgated at the time of writing this newsletter, as well as the numerous changes proposed in Budget 2026, there are some very real questions surrounding how and when these changes should be implemented.
SARS has released this FAQ which deals with many of the common issues: https://www.sars.gov.za/about/sars-tax-and-customs-system/budget/budget-2026-frequently-asked-questions/
Please note that this FAQ does not address what schools should be doing with regard to the changes to the VAT exemption in the 2025 Amendments which creates some very real issues. Schools are either going to have to keep charging VAT and then refund when/if the law is promulgated, or be in breach of the law in force, not charge VAT and be at risk of having to fund the shortfall if the amendment doesn’t pass. Neither option is tenable. No clarity has been received from SARS on how they view this issue.
AA88s Update
SARS has started a serious campaign of issuing AA88s to employers. This is intimated in the FAQ linked above, with this response:
Under Section 179 of the Tax Administration Act, SARS can issue a Third-Party Appointment (Form AA88) instructing any third party that holds money on behalf of the taxpayer, including banks, to pay the taxpayer’s debt directly to SARS. No court order is required. This typically follows a Letter of Final Demand if the debt remains unpaid. SARS can also issue AA88s against employers (for salary deductions) and debtors. Engaging proactively with SARS before an AA88 is issued is always preferable and leads to better outcomes.
Having said that, there are a number of issues that have been experienced with this process, not limited to:
- As much as SARS need not have a court order, per s179 SARS is required to notify the taxpayer and give them an opportunity to respond before SARS is entitled to issue the AA88. This has not been done in many instances. Unfortunately, this does not change anything for the employer.
- The AA88s are being issued to employers who have no relationship with the taxpayer in question.
- The Easyfile sync functionality is problematic and the detail is not always available / not reconcile with the letters received by the employer.
- The taxpayer has no outstanding amount on their Statement of Account, yet there is a debt order issued against them.
- SARS has in some instances told employers that the employer must pay the full amount to SARS, even though the amount requested is in excess of the employee’s salary. This is blatantly incorrect.
Employers are really caught between a rock and a hard place. The RCBs are taking this up with SARS, yet this is causing significant hardship to employees. At this point, there is no clear resolution, so employers are needing to object to each AA88 on a case-by-case basis.
Escalating Issues with SARS
SARS has finally updated the escalation process for KZN! Copied directly from the SARS correspondence issued to SAICA – click here for contact details.
Odds and Sods
- Draft Interpretation Note – Meaning of “holds a qualifying interest” Comments close 30 April
- SARS FAQs on Common Reporting Standard has been issued
- SARS FAQs on Crypto-Asset Reporting Framework Regulations has been issued
Tax Cases
Commissioner for the South African Revenue Service v Taxpayer 3C (VAT 12167) [2026] ZATC 2 (12 March 2026)
An interesting one. The main facts – the taxpayer filed for a refund of VAT based on bad debts, for which they did not have supporting documents. SARS reversed the input VAT, taxpayer objected. Where is went wrong for SARS is that they issued notice of the termination of ADR proceedings in December 2020. SARS only issued their Rule 31 response in December 2024.
In short, the courts held that this was clearly outside of the timelines given in the Rules. However, there were some extenuating circumstances, and there was a clear breach by the taxpayer. SARS therefore received a condonation for late submission and the matter will proceed. However, SARS was still ordered to pay attorney costs for the taxpayer.
Democratic Alliance v Minister of Finance and Others (2025/045530) [2026] ZAWCHC 102 (5 March 2026)
Very relevant to our discussion around when changes announced in the Budget Speech actually become enforceable law. In short, this is a continuation of the legal case that the DA launched when the VAT increase was proposed in the 2025 Budget Speech. The long and the short of it? Section 7(4), which allowed the Minister to announce a rate change in the Budget Speech was declared unconstitutional as it overrode the Parliamentary oversight of taxes. This case just adds urgency to the concerns raised around the changes announced and not yet promulgated. With the loss of a majority party, it’s no longer a given that a proposed change will actually make it into law. We need to be careful.
