Transfer pricing in South Africa at a glance
|Regulation Type||National regulations based on OECD Guidelines|
|Are there specific transfer pricing regulations?||Yes|
|Submission deadline upon request||Directly|
|Annual update required||No|
|Official language requirements||English|
|Potential impact of penalties||N/A|
South African tax law
Rules for transfer pricing in South Africa are based upon:
- Income Tax Act 58 of 1962
South Africa is not a member of the OECD but their regulations are, however, largely based on the OECD Transfer Pricing Guidelines.
Accepted methods are:
- the comparable uncontrolled price method
- the resale price method
- the cost plus method
- the profit split method
- the transactional net margin method
Priority of methods
Rules for transfer pricing in South Africa do not prescribe a specific priority of methods. However, a taxpayer should choose the most reliable method.
Information that should be included in the documentation:
South African regulations are unclear about the documentation requirements. However, the Income Tax Act states that a taxpayers should provide evidence on the arm’s length nature of cross-border related party transactions.
Officially taxpayers may submit their documentation in any of the eleven official languages of South Africa. However, usually documentation is provided for in English and English is also the language used by the South African Tax Authorities.
Requirements to prepare documentation annually
In South Africa taxpayers are not obliged to update their documentation annually.
Submission deadline upon request by tax authorities
Upon request of the Tax Authorities, a taxpayer should submit its documentation directly.
Advance Pricing Agreements
In South Africa it is not possible to obtain an Advance Pricing Agreement.
In South Africa no specific transfer pricing penalties are in place, meaning that ordinary penalties apply.