The South African Revenue Service (SARS) has announced that it will begin enforcing administrative penalties for trusts that fail to submit their income tax returns from May 4.

This comes after a consultation process in which stakeholders raised concerns about the complexity of trust tax compliance and requested additional time to resolve outstanding tax matters.

The revenue service said that the implementation date had been deferred to allow trustees to regularise their tax affairs, including submitting all outstanding returns and updating relevant information before penalties take effect.

"The Commissioner for SARS approved this request, and an additional two months were approved to enable trustees to regularise these matters.

The imposition of the first admin penalties for tax non-compliance by trusts has been deferred to 4 May 2026, being the first business day of May. Accordingly, no admin penalties will be imposed prior to this date," the revenue service said.

"This deferral provides additional time for trustees and their representatives to regularise the required tax affairs, including to submit all outstanding tax returns and to update any other details where applicable".

The revenue service also added that trusts which have been deregistered or no longer meet registration requirements must first complete all outstanding tax obligations.

"If a trust was deregistered with its regulatory authority or no longer meets the requirements to remain registered (non-resident trusts only), a formal deregistration process with SARS must be initiated. These trusts must finalise all outstanding tax obligations before requesting deregistration from income tax".

The deregistration process includes:

Submitting all outstanding tax returns;

Settling any outstanding tax liabilities; and thereafter

Providing supporting documentation confirming the termination of the trust

SARS also "encouraged all stakeholders to resolve all outstanding trust tax compliance matters and to submit deregistration requests on time.

"Failure to submit tax returns timeously and to deregister trusts for income tax may result in outstanding tax compliance obligations and, once the deferral period has lapsed, the imposition of admin penalties in cases of continued non-compliance".

*This article was first published by IOL News