“agreement for the avoidance of double taxation” means an agreement under section 108 that contains Articles that are the same as, or similar to, Article 9(2) and Article 25(3), as amended from time to time, of the Model Tax Convention on Income and on Capital of the Organisation for Economic Co-operation and Development;
“Advance pricing agreement” definition of section 76A of ITA
“advance pricing agreement” means-
(a) a DTA advance pricing agreement; and
(b) a unilateral advance pricing agreement;
Section 76A (ITA) – Definitions
PART IA
Advance Pricing Agreements
76A Definitions
In this Part, unless the context otherwise indicates-
Section 76D (ITA) – Fees for advance pricing agreements
76D Fees for advance pricing agreements
(1) In order to defray the costs of administering the advance pricing agreement system, the Commissioner may, by public notice, prescribe fees payable by an applicant, including-
(a) a pre-application consultation fee;
(b) an application fee;
(c) a cost recovery fee for processing an advance pricing agreement application; and
(d) fees associated with the maintenance or extension of an existing agreement.
(2) An applicant must pay the fees in subsection (1) based on an invoice issued by SARS.
(3) SARS may retain the fees referred to in subsection (1), or a portion thereof, if it rejects an advance pricing agreement application or terminates the agreement.
(4) The fees imposed under this section constitute fees imposed by SARS in terms of section 5(1)(h) of the SARS Act and constitute funds of SARS within the meaning of section 24 of that Act.
[Section 76D inserted by section 10 of Act 18 of 2023]
Section 76F (ITA) – Application for advance pricing agreement
76F Application for advance pricing agreement
(1) A prospective applicant may submit an advance pricing agreement application after receiving notification from the Commissioner under section 76E(4).
(2) If there is more than one applicant in respect of an advance pricing agreement, the applicants must join their applications into a joint application and designate one representative for the applicants.
(3) An advance pricing agreement application must be made in the prescribed form and manner.
(4) After considering an application for a DTA advance pricing agreement, the competent authority of the Republic must enter into discussions with the competent authority of the other country, which will be party to an affected transaction, on the feasibility of entering into the agreement with the applicant.
[Section 76F inserted by section 10 of Act 18 of 2023]
Section 76G (ITA) – Amendments to advance pricing agreement application
76G Amendments to advance pricing agreement application
(1) An applicant may make a written request to the Commissioner for an amendment to an advance pricing agreement application submitted to the Commissioner.
(2) The Commissioner may allow the amendment to the advance pricing agreement application if the amendment does not have the effect of materially altering the nature of the application that was originally submitted.
(3) The amendment will be considered only if the applicant agrees to, and pays, an additional cost recovery fee in terms of section 76D(1)(c) that is invoiced in terms of section 76D(2).
[Section 76G inserted by section 10 of Act 18 of 2023]
Section 76H (ITA) – Withdrawal of advance pricing agreement application
76H Withdrawal of advance pricing agreement application
(1) An applicant may withdraw an advance pricing agreement application before the notification under section 76J(4) or 76J(7).
(2) The withdrawal does not absolve an applicant from the liability for fees that are due and payable in terms of section 76D.
[Section 76H inserted by section 10 of Act 18 of 2023]
Section 76I (ITA) – Rejection of advance pricing agreement application
76I Rejection of advance pricing agreement application
The Commissioner may reject an advance pricing agreement application if the application does not meet-
(a) the requirements of this Part; and
(b) such additional requirements as the Commissioner may prescribe by public notice.
[Section 76I inserted by section 10 of Act 18 of 2023]
Section 76J (ITA) – Processing of advance pricing agreement application
76J Processing of advance pricing agreement application
(1) Once the Commissioner accepts the advance pricing agreement application, the Commissioner must process the application in accordance with the requirements as prescribed, by public notice, by the Commissioner.
(2) The Commissioner must, in writing, inform the applicant at 90-day intervals, commencing on receipt of the advance pricing agreement application referred to in section 76F(1), of the progress made in processing the advance pricing agreement application, and must issue invoices for purposes of section 76D(2) with the progress reports.
(3) Based on the information provided in the advance pricing agreement application, the Commissioner must prepare a preliminary advance pricing agreement containing such information as may be prescribed, by public notice, by the Commissioner.
(4) In the case of a unilateral advance pricing agreement, the Commissioner must send the preliminary agreement to the applicant to accept or reject the agreement.
(5) In the case of a DTA advance pricing agreement, the Commissioner must send the preliminary agreement to the competent authority of the other country, which will be party to an affected transaction in the agreement, for the competent authority to consider if it is in agreement with the position adopted in the agreement, after taking into account the agreement for the avoidance of double taxation with that country.
(6) The Commissioner must, in writing, notify the applicant once subsection (5) has been complied with.
(7) If the competent authority in subsection (5) agrees, in writing, to the position adopted in the preliminary agreement, the Commissioner must send the preliminary agreement to the applicant to accept or reject the agreement.
[Section 76J inserted by section 10 of Act 18 of 2023]
Section 76K (ITA) – Finalisation of advance pricing agreement
76K Finalisation of advance pricing agreement
(1) If an applicant accepts the preliminary advance pricing agreement in terms of section 76J(4) or 76J(7), the applicant must sign the agreement and return it to the Commissioner.
(2) At least two SARS officials delegated to do so, one of whom is the competent authority of the Republic in the case of a DTA advance pricing agreement, must sign the preliminary advance pricing agreement once subsection (1) has been complied with.
(3) Once subsection (2) has been complied with, the Commissioner must send the advance pricing agreement to the applicant and, in the case of a DTA advance pricing agreement, also to the competent authority of the other country referred to in section 76J(5).
(4) An advance pricing agreement will come into effect once subsections (1), (2) and (3) have been complied with.
(5) The advance pricing agreement is applicable for up to a maximum of five consecutive years of assessment, commencing on the day after the end of the year of assessment in which the associated advance pricing agreement application is received by the Commissioner.
(6) Based on a specific request by the applicant in an advance pricing agreement application, the Commissioner may allow the associated advance pricing agreement to be applicable for up to a maximum of three consecutive years of assessment, ending on the last day of the year of assessment in which the advance pricing agreement application is received by the Commissioner: Provided that the advance pricing agreement will not result in a cumulative decrease in taxable income or increase in assessed loss for the years of assessment.
(7) The total duration in subsection (6) will be in addition to the total duration in subsection (5).
[Section 76K inserted by section 10 of Act 18 of 2023]