Under the Tax Administration Act (28/2011), persons who enter into certain types of transaction must report the details of those transactions to the South African Revenue Service (SARS). These types of transaction are called 'reportable arrangements'.

Tax Administration Act's definitions

The list of transactions that must be reported are set out in Sections 35(1) and 35(2) of the Tax Administration Act, as read with a SARS notice issued pursuant to that provision.

The term 'reportable arrangement' is defined in Section 34 of the act as "an 'arrangement' referred to in section 35(1) or 35(2) that is not an excluded 'arrangement' referred to in section 36".

The term 'arrangement' is defined in Section 34 of the act as "any transaction, operation, scheme, agreement or understanding (whether enforceable or not)".

The term 'participant' is defined in Section 34 of the act as:

  • a person who promotes the arrangement;
  • a person who may obtain a tax benefit by virtue of the arrangement; or
  • a party to an arrangement as listed in a public notice under Section 35(2) of the act.

What information should taxpayers submit when reporting arrangements?

Section 38 of the Tax Administration Act sets out the information which a taxpayer must submit to SARS when reporting an arrangement.

For purposes of this contribution Section 37(1) of the act is crucial, as it reads as follows:

The information referred to in section 38 in respect of a 'reportable arrangement' must be disclosed by a person who:

(a) is a 'participant' in an 'arrangement' on the date on which it qualifies as a 'reportable arrangement', within 45 business days after that date; or

(b) becomes a 'participant' in an 'arrangement' after the date on which it qualifies as a 'reportable arrangement', within 45 business days after becoming a 'participant'.

Timeframe for disclosure of reportable arrangements

Section 37(5) of the Tax Administration Act states that SARS may grant an extension for disclosure for a further 45 business days if reasonable grounds exist for the extension.

In order to determine when the information must be disclosed by, the parties must first establish when the arrangement qualified as a reportable arrangement.

For example, if an agreement which could give rise to a reporting requirement is subject to a suspensive condition, will the agreement qualify as a reportable arrangement when it has been concluded or when the suspensive condition has been fulfilled?

Unfortunately, the act is unclear on when the 45-day period begins.

Before its amendment (with effect from 20 January 2015), Section 37(4) of the act required participants to disclose the arrangement within 45 days of the date that:

  • any amount was first received by or accrued to a participant under the arrangement; or
  • an amount was paid or incurred by a participant under the arrangement.

By implication, in the case of an agreement which is subject to a suspensive condition, the earliest date would have been the date when the condition was fulfilled.

On the other hand, the term 'arrangement' does not require an agreement to be enforceable to fall within the definition. However, the word 'enforceable' should be understood to mean legally binding between the parties (ie, an agreement which, for example, is not rendered void by statute).

The prescribed SARS form for disclosing reportable arrangements (RA01) requires participants in Part 3 (under the heading "Information regarding the reportable arrangement") to disclose only the "[d]ate [the] reportable arrangement was entered into".

However, a common sense approach should be adopted. The effect of a suspensive condition is to suspend the full operation of obligations and render the obligations dependent on an uncertain future event. An agreement which is subject to a suspensive condition is valid from the moment of its conclusion. However, non-fulfilment of a suspensive condition renders the contract void retrospectively.(1)

For example, one type of reportable arrangement is one that does not result in a reasonable expectation of pre-tax profit (Section 35(1)(d) of the Tax Administration Act). Clearly, an agreement that is subject to a suspensive condition will actually result in an outcome only if the condition has been fulfilled.

If a participant must report a conditional agreement within 45 days of the date of the agreement's conclusion, it would mean that a participant must report an arrangement which may never take effect. It is unlikely that the act was intended to require the reporting of agreements which are void due to the non-fulfilment of conditions.


It would be useful if clarity was provided through a change to the law or a guidance note from SARS, particularly considering the stiff penalties that are imposed for late disclosure in terms of Section 212 of the Tax Administration Act.

In the meantime, taxpayers should err on the side of caution and ensure that reportable arrangements are disclosed within 45 days of the conclusion of the relevant agreements, despite the fact that the agreements may be conditional.


(1) See The Law of South Africa Volume 9 Third Edition at paragraph 362; and Bradfield, GB The Law of Contract in South Africa Seventh Edition at page 171.

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