15% Global Minimum Tax (GMT) Goes Live at SARS

These rules address profit shifting by multinational groups to low- or no-tax jurisdictions and ensure a minimum level of tax is paid on income in every jurisdiction in which MNEs operate.

South Africa enacted the GloBE minimum tax legislation in 2024 and 2025, enabling SARS to impose a multinational top-up tax at a rate of 15% on the excess profits of affected MNE Groups. This tax effectively brings the overall taxation of foreign profits up to a minimum agreed level of 15%, where those profits have been subject to little or no tax offshore.

As such, the GMT is expected to generate significant additional tax revenues by curbing tax avoidance, ensuring multinational corporations contribute their fair share of taxes, and extending the country’s tax base.

The GMT is expected to raise an estimated R2 billion in South African tax revenues. The broadened tax base will open opportunities to lower the personal income tax burden on individuals, or to consider more globally competitive corporate tax rates than the current 27%, which is well above the international average.

Which companies are directly affected?

The GloBE Rules apply to MNE Groups whose consolidated annual revenues equal or exceed EUR 750 million in at least two of the tax years immediately preceding the reporting fiscal year.

GMT deadlines

The local legislation governing GMT is deemed to have come into operation on 1 January 2024 and applies to MNEs’ subsequent “fiscal years”. Here are the deadline dates as published by SARS.

Source: SARS

How will the tax be calculated?

• The multinational top-up tax under the GMT legislation is imposed under:
• An Income Inclusion Rule (IIR) which taxes the domestic constituent entity (DCE) of an MNE Group on its allocable share of top-up tax arising in respect of the low-taxed income of any foreign group company in which it has a direct or indirect ownership interest.
• A Domestic Minimum Top-Up Tax (DMTT) imposes a “joint and several” tax liability on DCEs for top-up tax arising in respect of low-taxed income, calculated on an aggregate basis but only with respect to the entities located in South Africa.

Registration and reporting obligations

• Affected DCEs must register with SARS and file a GloBE Information Return (GIR) using the prescribed form and format by the prescribed due date.
• SARS must be notified where a “designated local entity” is appointed by DCEs required to file a GIR.
• DCEs must submit the notice no later than 6 months prior to the filing due date of the GIR. This due date is 15 months after the end of the reportable fiscal year for which the GIR must be filed (extended to 18 months for the 2024 fiscal year or the first fiscal year).
• DCEs must file the first GIR no later than 18 months after the end of the first reportable fiscal year. For the 2024 reportable fiscal year the GIR must be filed before 30 June 2026 (assuming a calendar year).
• The second and subsequent GIRs must be filed no later than 15 months after the end of the second and following reportable fiscal years.

SARS is ready: Are you?

SARS is actively preparing to administer the GloBE framework, with a dedicated project team, including IT and system engineers, and a specialised unit within its Large Business & International Unit. It aims to promote voluntary compliance and simplify adherence with the GMT legislation.

Even so, a significant compliance burden and increased reporting scrutiny awaits affected companies. They will have to comply with new and technically demanding rules, even if no global minimum tax is ultimately payable. This will likely require specialist expertise, resulting in substantial additional compliance costs.