Two types of taxpayers in South Africa that need to watch out for SARS

Trusts and non-profit organisations (NPOs) need to be on high alert this tax season, with the South African Revenue Service (SARS) expected to ramp up its scrutiny of submissions in 2025.

According to tax experts at Tax Consulting SA, the revenue service has been investing heavily in advanced data analytics and artificial intelligence, which it is ready to sic on the mountain of documentation it has.

This means that submissions such as the IT3(d) and IT3(t) reports related to trusts and non-profits and public benefit organisations can be assessed with greater precision.

“By using advanced data analytics and artificial intelligence SARS is able to raise automated tax assessments for individuals,” Tax Consulting said.

“This allows quicker detection of underreported income, and a broader reach into the unregistered or non-compliant taxpayer populations, with a focus on trusts and non-profits.”

Section 18A-approved NPOs are required to submit IT3(d) forms to SARS, reporting all tax-deductible receipts issued to donors during the year of assessment.

SARS uses this data to cross-reference donor claims and ensure that tax deductions are valid and correctly disclosed.

The process also preserves the integrity of the public benefit sector by maintaining transparency and enabling donor trust.

IT3(d) forms had to be submitted by 31 May 2025, and any organisation that missed the deadline now faces losing Section 18A approval, making future donations non-deductible, and further audits and possible penalties.

Even those who submitted on time are at risk, as SARS expects accurate submissions from the outset.

“Incomplete or incorrect data not only causes delays but may undermine the organisation’s standing with donors and regulators alike,” the experts said.

With new technology and tighter scrutiny, these errors are more likely to be picked up.

Trusts are under the microscope

Trusts are equally under the compliance spotlight. Over the last two years, SARS has initiated a host of new requirements for these entities to ensure that they are operating above board.

Trusts have to submit the IT3(t) form, which is now an annual reporting requirement.

This ensures that income and capital gains distributed to beneficiaries are disclosed accurately and taxed appropriately.

In addition to financial disclosures, SARS has reinforced its expectations around beneficial ownership transparency.

Trustees must ensure that SARS is accurately informed of the individuals who ultimately benefit from trust income or assets. The deadline for IT3(t) submissions is 30 September 2025.

Tax Consulting warned that trustees have a lot more to take into consideration now, including SARS’ use of third-party data to identify and register previously unregistered trusts.

Notably, trustees are personally and jointly liable for a trust’s tax compliance, and administrative penalties are expected to be imposed on non-compliant trusts, particularly for the non-submission of IT3(t) or income tax returns.

“Passive or inactive trusts are not exempt. All trusts must comply with annual tax return obligations,” the group said.

“SARS’s 2025 guidance reiterates that no trust is legally considered ‘dormant’ and fiduciary obligations persist even in the absence of active trading or distributions.”

The tax experts stressed that 2025 is not the year for taxpayers to try and play games and dance around the taxman.

In its effort to meet the ambitious 2025/26 revenue estimate of R1.986 trillion, SARS has made it clear that it will be doggedly pursuing non-compliant taxpayers.

Following the Budget Speech on 21 May 2025, SARS reaffirmed its commitment to chasing after an additional R20 billion in collections at minimum, pushing for R50 billion.

Tax season 2025 dates