The regulatory environment for businesses in South Africa is becoming increasingly
volatile, complex, and unforgiving. With global pressure to combat financial crimes like
money laundering and terrorism financing, the focus on transparency and accountability
has intensified. For local businesses, this translates directly into new, stringent
compliance requirements, particularly around Beneficial Ownership (BO). Staying ahead
isn’t just about avoiding penalties; it’s a core component of effective risk management in a
modern, unpredictable market.

The New Era of Beneficial Ownership Reporting
The most immediate and impactful change for many South African companies and close
corporations stems from the General Laws (Anti-Money Laundering and Combating
Terrorism Financing) Amendment Act, 2022. This legislation has driven two major
reporting shifts: one from the Companies and Intellectual Property Commission (CIPC)
and another from the South African Revenue Service (SARS).

CIPC’s Beneficial Ownership Register
The CIPC now mandates that all companies and close corporations file and maintain a
Beneficial Ownership Register.

• Who Must be Declared? Any natural person who ultimately owns or exercises
  effective control over the entity, either directly or indirectly, by holding a beneficial
  interest of 5% or more in the company or close corporation.
• The Filing Requirement: This information must be filed with the CIPC online,
  typically when submitting the entity’s Annual Return or within 10 days of any
  change in ownership/control.
• Key Challenge: The CIPC system requires following the ownership chain all the way
  to the natural person(s), which can be complex for entities with layered structures
  (e.g., holding companies, trusts, or foreign entities as shareholders). The filing also
  requires supporting documents, including a written mandate to the filer and
  certified ID copies of the beneficial owners.
• The Risk: Failure to comply results in the entity being marked as non-compliant,
  which can block all future transactions with CIPC (like filing annual returns or
  making director changes) and lead to compliance notices and administrative fines.

SARS’ Integration into Tax Returns
In parallel, SARS has integrated Beneficial Ownership reporting into its tax administrative
functions.

The Risk: SARS uses this data for cross-referencing and verification to combat tax
evasion and ensure compliance with international standards (like those from the
Financial Action Task Force – FATF). Discrepancies or non-disclosure can trigger
audits, penalties, and deeper investigations into the company’s and owners’ affairs.
The key takeaway is that you now face a dual reporting obligation—one for corporate
governance (CIPC) and one for tax transparency (SARS)—which requires consistent and
accurate data across both platforms. Xero Accountants now have this in their Software.
Compliance should be a living, breathing part of the business, not an annual chore.a.

Corporate Tax (ITR14): Companies filing their Corporate Income Tax Return (ITR14)
for tax years 2022 and onwards are now required to disclose details of their
beneficial owner(s). The focus is on the individual(s) who ultimately own or exercise
effective control.

Trusts and Individuals: SARS has also enhanced reporting for Trusts, requiring
trustees to submit BO details for all beneficiaries who can be identified by name.
Furthermore, in the 2024 tax filing season, the requirement was extended to
individual taxpayers involved in partnerships.