The implementation of the GloBE Model Rules in the GMT legislation enables South Africa to impose a multinational top-up tax at a rate of 15% on the excess profits of in-scope MNE Groups. 

The South African Revenue Service (SARS) has issued an update, on 12 September 2025, on its application of the Pillar 2 GloBE rules.

The Organisation for Economic Co-operation and Development (OECD) introduced the Global Anti-Base Erosion (GloBE) Model Rules under the Pillar Two initiative on 8 October 2021.

These are model rules agreed by the Base Erosion and Profit Shifting (BEPS) Inclusive Framework to establish a global minimum tax framework for large multinational enterprises (MNEs) to ensure that they pay a minimum level of tax on their income in respect of every jurisdiction where they operate.

In alignment with this initiative, South Africa enacted the GloBE minimum tax (GMT) legislation, which comprises the Global Minimum Tax Act, 2024 (GMTA) enacted on 24 December 2024, and the Global Minimum Tax Administration Act 2024 (GMTAA), enacted on 9 January 2025. These Acts are administrated by the Commissioner, deemed to come into operation on 1 January 2024 and applies to “fiscal years” (the accounting period used in the consolidated financial statements of in-scope MNEs) beginning on or after that date.

The purpose of implementing the GloBE Model Rules in South Africa in the GMT legislation is to enable South Africa to impose a multinational top-up tax at a rate of 15% on the excess profits of in-scope MNE Groups. The GloBE Rules apply to MNE Groups whose consolidated annual revenues in at least two of the four preceding fiscal years equal or exceed EUR 750 million.

The multinational top-up tax under the GMT legislation is imposed under—

  • An Income Inclusion Rule (IIR) which taxes the domestic constituent entity 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; and
  • A Domestic Minimum Top-Up Tax (DMTT) which imposes a joint and several tax liability on the domestic constituent entities of an MNE Group for any top-up tax arising in respect of low-taxed income of these entities (calculated on an aggregate basis but only with respect to the entities located in South Africa).

The registration and reporting obligations Domestic Constituent Entity of in-scope MNEs in terms of the GMTAA, is as follows:

  • A Domestic Constituent Entity (DCE) of an in-scope MNE Group, Domestic Joint Venture or Domestic Joint Venture Subsidiary of a Domestic Joint Venture Group must register with SARS, as well as file a GloBE Information Return (GIR) with SARS in the prescribed form and format by the prescribed due date, under the GMT legislation.
  • Where a “designated local entity” is appointed by one or more DCEs required to file a GIR, each of the DCEs that appointed the designated local entity must notify SARS of the identity of the designated local entity that will file on its behalf
  • The DCEs must submit the notice no later than six months prior to the filing due date of the GIR. This due date is 15 or 18 months after the end of the reportable fiscal year for which the GIR must be filed (for the 2024 fiscal year or the first fiscal year that the GIR must be filed by a DCE, this period is 18 months). For example, the notifications in respect of the 2024 fiscal year must be filed before 31 December 2025 (assuming the fiscal year is a calendar year)
  • File the first GIR no later than eighteen months after the end of the first reportable fiscal year. For example, for the 2024 reportable fiscal year the GIR must be filed before 30 June 2026 (assuming a calendar year)
  • File the second and subsequent GIR no later than fifteen months after the end of the second and following reportable fiscal years.

Earlier, South Africa published the Global Minimum Tax Act, 2024 (the GMT Act), in the Official Gazette on 24 December 2024.