The South African Revenue Service (“SARS”) has issued a substantially expanded new “Guide to the Voluntary Disclosure Programme (Issue 2)” dated 21 May 2026, materially broadening its published interpretation of the Voluntary Disclosure Programme (“VDP”) under Chapter 16 of the Tax Administration Act.

At first glance, the updated guide appears to be a positive development for taxpayers and practitioners alike. It provides significantly more technical and interpretative guidance than the previous 2025 guide and offers greater clarity on several practical areas which have historically caused uncertainty in VDP matters.

The VDP was introduced to increase voluntary compliance in the interest of enhanced tax compliance, good management of the tax system, and the best use of SARS resources. It is intended to encourage taxpayers to voluntarily disclose tax defaults.

Whilst SARS has now materially expanded its commentary on qualification requirements, audits, prescription and understatement implications, one of the most commercially significant issues facing taxpayers today remains entirely absent from the guide, namely the remission of interest in VDP matters. That omission may ultimately prove to be one of the most important aspects of the new guide.

SARS Expands Its Interpretation of the VDP Framework

The previous SARS VDP guide was largely operational and process-driven, focusing primarily on eFiling mechanics, VDP01 completion, workflow processes and supporting document uploads.

The newly issued guide is materially different.

SARS now deals extensively with:

• what constitutes a “default”;
• inaccurate and incomplete disclosures;
• the adoption of tax positions;
• understatement implications;
• voluntariness requirements;
• audits versus verifications;
• prescription under section 99; and
• qualification requirements under section 227 of the Tax Administration Act.

This is not merely an administrative update, but a substantial expansion of SARS’ interpretation of how the VDP framework is intended to operate in practice.

Importantly, SARS now expressly distinguishes between audits, verifications and inspections, confirming that a verification process does not automatically constitute an “audit” for purposes of section 226(2) of the Tax Administration Act (“TAA”). 

This is an important practical clarification because many taxpayers incorrectly assume that any form of SARS engagement immediately disqualifies them from seeking VDP relief.

However, SARS also makes it clear that where a taxpayer becomes aware of a default through a verification or inspection process, the disclosure may nevertheless fail the “voluntary” requirement depending on the facts and circumstances of the matter. In practice, this means taxpayers can no longer assume that waiting for SARS engagement before taking action will preserve access to VDP relief.

Prescription Risks Are Also Now Squarely Addressed

The updated guide also introduces more extensive discussion regarding prescription and SARS’ ability to reopen historic tax periods. SARS confirms its view that VDP applications may extend into periods which taxpayers may otherwise regard as prescribed, especially where non-disclosure, misrepresentation or material omissions may permit SARS to invoke section 99 of the TAA. 

This is particularly significant given the increasing number of historic offshore, trust, crypto asset and cross-border matters currently surfacing through SARS’ enhanced data collection and third-party reporting systems. Many taxpayers continue to operate under the mistaken assumption that the mere passage of time protects historic non-compliance from scrutiny, but the new guide strongly suggests otherwise.

SARS is Quiet About Interest Remission

Perhaps the most notable aspect of the new guide is what it does not say. 

Despite materially expanding its commentary across numerous technical VDP issues, SARS remains entirely silent regarding the remission of interest within the VDP framework. This is striking given the Constitutional Court’s decision in Medtronic International Trading S.A.R.L, which exposed the legislative limitations surrounding simultaneous VDP and interest remission relief.

Following that judgment, the National Budget Review indicated that legislative amendments are anticipated to permit taxpayers to seek remission of interest together with VDP relief in certain circumstances. 

Against that backdrop, many taxpayers and practitioners expected SARS’ updated guide to provide at least some operational or procedural clarity regarding:

• whether SARS will entertain simultaneous interest remission requests;
• how such requests should be submitted;
• whether separate applications will be required; or
• how SARS intends implementing the anticipated legislative amendments in practice.

Instead, the guide says nothing. That silence is commercially significant. In many substantial VDP matters, the financial exposure is not necessarily the capital itself, but rather the accumulated interest arising over multiple years of historic non-compliance. For many taxpayers, the uncertainty surrounding interest remission may materially impact whether disclosure remains commercially viable at all.

The Silence Appears Deliberate

The omission is difficult to ignore because the guide otherwise materially expands SARS’ interpretative commentary throughout. SARS devoted substantial attention to:

• qualification requirements;
• voluntariness;
• audits versus verifications;
• understatement mechanics;
• tax positions; and
• prescription implications.

The complete absence of any meaningful discussion regarding interest remission thus appears unlikely to be accidental. This most probably indicates either that SARS is awaiting formal legislative implementation before issuing guidance, or that internal policy alignment regarding simultaneous VDP and interest remission applications remains unresolved.

Either way, taxpayers currently considering disclosure remain exposed to uncertainty regarding one of the largest financial components of historic tax defaults.

SARS’ Enforcement Environment Continues to Intensify

The updated guide must also be viewed within the context of SARS’ broader enforcement environment. With increased SARS funding, enhanced data analytics, financial institution reporting obligations, cross-border information exchange mechanisms, cryptocurrency tracing capabilities and Project AmaBillions enforcement initiatives, SARS’ visibility into historic non-compliance continues to expand rapidly. The practical reality is that historic defaults are becoming increasingly difficult to conceal indefinitely.

For many taxpayers, the VDP framework remains one of the few available mechanisms to regularise historic defaults before SARS commences formal enforcement action.

The updated guide also reinforces that the VDP process is not a simple administrative filing exercise. It is a highly technical legal process requiring careful consideration of:

• qualification requirements;
• prescription exposure;
• understatement implications;
• voluntariness risks;
• audit status; and
• broader strategic considerations.

Taxpayers should therefore approach VDP applications carefully and strategically, particularly where substantial historic exposures or complex cross-border structures are involved. 

The new guide ultimately provides valuable insight into SARS’ evolving interpretation of the VDP framework. At the same time, however, its silence on interest remission confirms that one of the most commercially important aspects of the modern VDP landscape remains unresolved.

Written by André Daniels, Head of Tax Controversy & Dispute Resolution at Tax Consulting SA