Mthobisi Nozulela|Published
The South African Revenue Service (SARS) has resumed issuing final demand letters to trusts with outstanding income tax returns, warning trustees that they could face monthly penalties if they fail to meet their tax obligations.
Sohail Arnoldus, Senior Tax Consultant at Tax Consulting SA, said the renewed enforcement follows the cancellation of penalties imposed earlier this year on certain trusts that had failed to submit their 2024 and 2025 income tax returns.
The cancellations came after concerns were raised about the timing of the initial demands, which were issued before the relevant public notice was published in March 2026.
"Final demand letters issued in October 2026 indicate that SARS has recommenced its enforcement after concerns raised regarding the legal validity of the initial penalty process led to the temporary reprieve," he said.
"This time, the demands have been issued following the publication of the relevant public notice. Trustees should therefore not mistake the earlier reversals for an exemption from their statutory filing obligations".
He warned that trusts with outstanding returns should be brought up to date within the prescribed 21-business-day period after a qualifying final demand is issued to avoid administrative penalties.
Penalties can reach R16,000 a month
The penalties range from R250 to R16,000 a month, depending on the applicable category, and may continue for up to 35 months while the non-compliance persists.
"Trustees should urgently review their trusts’ compliance status and submit any outstanding income tax returns within the prescribed 21-business-day period".
"They should also verify that previously reversed penalties have been removed from their SARS accounts. Where penalties are incorrectly imposed, the available remission and dispute resolution procedures should be considered."
He also warned that "dormant or inactive trusts are not automatically exempt from filing obligations and should pursue formal deregistration where appropriate."
"With SARS issuing fresh final demands under the published legal framework, trustees must prioritise compliance to avoid recurring penalties and unnecessary financial exposure."
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