SARS Issues Draft Notice on CRS Non-Compliance Penalties

Posted 03 July 2025 Written by Acts Online
Category Tax

Brought to you by SA Accounting Academy: The South African Revenue Service (SARS) has issued a draft notice in terms of section 210(2) of the Tax Administration Act, No. 28 of 2011, identifying specific incidences of non-compliance that will trigger administrative penalties.

In terms of section 210(2) of the Tax Administration Act, No. 28 of 2011, non-compliance is defined as a failure to comply with an obligation imposed under a tax Act that is listed in a public notice issued by the Commissioner. Once an incidence is listed, SARS is required to impose administrative non-compliance penalties in accordance with the framework set out in section 211 of the Act.

The draft notice primarily addresses non-compliance by Financial Institutions (FIs) regarding due diligence and reporting requirements under the Common Reporting Standard (CRS). Under the current regulatory framework, established by Notice No. 193 in Government Gazette No. 40660 of 3 March 2017, SARS is required to provide prior notice to a defaulting FI. The FI then has 60 business days to remedy the non-compliance before a penalty is imposed.

The proposed notice seeks to align CRS penalties with the broader administrative penalty regime by:

  • Removing the requirement for SARS to issue a prior notice of non-compliance;
  • Abolishing the 60-day remedial period currently granted to Financial Institutions; and
  • Ensuring that administrative non-compliance penalties are imposed immediately upon the detection of a default.

While the remedial period is removed, affected parties retain the right to submit a request for remittance or lodge an objection and appeal against the penalty. Upon commencement, this notice will repeal Notice No. 193 of 3 March 2017. The deadline for public comment on the draft was 27 June 2025.

Click here to download the Draft Notice under Section 210 and the accompanying Explanatory Note.

What this means for you, your business, or your clients

  • For yourself: You must update your technical knowledge of the Tax Administration Act, No. 28 of 2011, specifically regarding the shift from remedial notice periods to immediate penalty imposition for CRS defaults.
  • For your business: Audit firms and tax practices must review their internal compliance calendars and quality control procedures to ensure that any CRS-related filings for the firm are error-free, as the 60-day grace period for corrections after a SARS notice will no longer exist.
  • For your clients: Financial Institutions must be advised to implement more rigorous pre-submission validation for CRS reporting, as the removal of the 60-day remedial window means administrative penalties will be triggered automatically upon any detected non-compliance.

Originally published at https://accountingacademy.co.za/news/read/sars-draft-notice-incidences-of-non-compliance

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