Third-party reporting places yet another compliance burden on Trustees 

by | Jul 26, 2023 | Advisory Services | 0 comments

Many PBOs and Trusts are now required to submit third-party returns to SARS. Read on to find out how this might affect you, and what you need to do to mitigate the risks. 

South Africa’s recent greylisting led to the promulgation of Act No. 22 of 2022: General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act. This resulted in amendments to several other pieces of legislation including the Trust Property Control Act and the Companies Act. As promised in our recent article about the risks of acting as an independent trustee we will now unpack Government Gazette No. 48862 published on 30 June 2023 and how this impacts Trustees.

The newly issued Government Gazette sets out the recent legislative changes and requirements related to the submission of returns of information by third parties in terms of Section 26 of the Tax Administration Act, 2011. 

These changes, outlined by Edward Kieswetter, Commissioner for the South African Revenue Service, aim to enhance transparency and compliance in the taxation system. This article will provide an overview of Trustees’ responsibilities regarding third-party returns, including exactly what information needs to be submitted, and when it’s due.

DescriptionPublic Benefit Organisations (PBOs)Trusts
Persons required to submit third-party returnsPersons issuing receipts under Section 18A(2) of the Income Tax Act: Any person referred to in Section 18A(0)(a) to (e) of the Income Tax Act, who has issued a receipt in terms of Section 18A(2), is required to submit third-party returns. This includes entities listed in paragraph 214 to whom a section 18A receipt has been issued.A “trust” as defined in section 1 of the Income Tax Act, that is “resident” as defined in that section, or a “non-resident” trust that is required to submit an annual income tax return, excluding―
1) a Collective Investment Scheme as defined in the Collective Investment Schemes Control Act, 2002, a “portfolio of a collective investment scheme” and any “portfolio of a hedge fund collective investment scheme”
2) an Employment Share Incentive Scheme Trust.
The persons mentioned above must divulge the following informationAny amount donated to an entity listed in paragraph 214 for which a section 18A receipt has been issued.
All information must be included on the section 18A receipt. Please note there are new information requirements effective 1 March 2023.
Any amount vested in a beneficiary, including income (net of expenditure), capital gains, and capital amounts.
Due dates for submitting third-party returns• Returns for the period 1 March to 31 August, must be submitted by 31 October of each year.
• Returns for the period 1 March to the end of February, must be submitted by 31 May of each year.
NB: Persons required to submit a return for the first time as a result of being newly listed, need not submit a return for the period from 1 March 2023 to 31 August 2023.
For trusts, all prescribed information in respect of the period from 1 March to the end of February must be submitted by 31 May of each year.

Practical implication of new legislative requirements:


The third-party submission deadline (31 May) is just three months after financial year-end (28 February). This gives Trustees three months to calculate accurate figures for their third-party returns. Given this tight timeline it’s highly likely that some statements will only be in draft format and/or based on provisional tax calculations. There are several reasons for this: trust financials are hugely reliant on third-party data themselves; tax certificates from some investment houses are unlikely to be available; and related company financials (interest bearing loans) might not be finalised.

Because the deadline follows the provisional tax season so closely, Trustees – together with their appointed registered representative for SARS – will have to carefully plan and prepare in advance to ensure timeous submission and to reduce the risk of non-compliance. 

We highly recommend that all Trustees (including the appointed registered representative with SARS) together with their accountants, compliance officers and tax practitioners are well versed in the new legislation, including the application of attribution rules.


The three main risks are: 

  1. Late submission leading to penalties and/or fines due to unprepared/uninformed parties or due to third-party information not being available. 
  2. Incorrect submission based on provisional calculations while trustees wait for final tax certificates from investment houses. 
  3. Working with accountants, compliance officers and/or tax practitioners who are not up-to-date with current legislation or who have limited experience with calculating trust taxes. We kindly remind trustees that calculating trust taxes remains the responsibility of Trustees (including the appointed registered representative with SARS), even if a practitioner has been appointed specifically to assist with the submission of information for the IT3t. Information submitted by practitioners does not absolve Trustees from their responsibilities (and the associated risks). Always ensure your practitioner is abreast of legislative changes, and has the necessary skills and capacity to assist. 

Compliance cost:

Bearing in mind the additional administrative requirements and compliance obligations, Sentinel has taken swift action to bolster its compliance teams across the country to enable us to assist Trustees with timeous submissions and risk mitigation. The extra effort it will take to ensure that clients are serviced professionally and timeously means that additional fees will have to be charged. Should additional administrative requirements and compliance obligations arise, additional fees may follow. Sentinel International Advisory Services has taken this step to bolster the compliance division to assist Trustees with timeous submissions and risk mitigation.

Ensuring compliance

As your trusted advisory service, we strongly emphasize the importance of complying with these legislative changes and requirements. Failure to adhere to the specified obligations may lead to penalties and legal consequences. We recommend reviewing the above summary thoroughly and seeking professional guidance if needed. We are here to assist you in navigating these additional requirements and ensuring compliance with SARS.

At Sentinel International, we remain committed to providing you with up-to-date information and guidance to help you meet your tax obligations. As we are working in a rapidly-changing regulatory environment, we ask that you keep a close eye on our newsletters to stay abreast of developments.