Draft Ruling on Filing Dates When a Company Changes Its Financial Year
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SARS has released a draft Binding General Ruling (BGR) that clarifies exactly what happens to your filing deadlines when a company changes its financial year-end. If you work with companies that have recently restructured, been acquired, or aligned with a holding company, this ruling directly affects how you manage their returns.
What is This Ruling About?
When a company changes its financial year-end, for example from 31 December to 30 June, the knock-on effect on tax return deadlines has historically been unclear. This draft BGR addresses that directly. It covers income tax returns, provisional tax, mineral royalties, and VAT.
The ruling is still in draft form. SARS has not yet published the final effective date, but practitioners should get familiar with the framework now.
The Core Rules in Plain Language
Income tax returns
A company can only submit one income tax return per year of assessment. If a financial year change results in two accounting periods falling into a single year of assessment, those periods must be combined into one return, even if that means a 14-month or 18-month return perio
If the change shortens the year, for example bringing the year-end forward, the result is a shorter return for that transition year. If it extends the year, the company submits one combined return covering the full extended period.
SARS systems do not allow two returns for the same year of assessment. There is no workaround.
Provisional tax
Provisional tax deadlines shift entirely when the financial year changes. The six-month first payment and the year-end second payment are both measured from the start of the new year of assessment, not the old one.
There is one important exception: if the new year of assessment is six months or shorter, the first provisional tax payment is not required at all.
The optional third (top-up) payment remains available and is calculated against the new year of assessment.
Mineral royalties
The mineral royalties cycle is directly tied to the income tax year of assessment. A SARS-approved change to the financial year-end automatically updates the mineral royalties deadlines. No separate application to SARS is required for the royalties system. If a year of assessment for mineral royalties has already been assessed, the change only takes effect from the following year.
VAT
A financial year change does not affect a company's VAT tax periods, unless the company is a Category E VAT vendor. Category E vendors have a tax period aligned to their year of assessment, so if the year of assessment changes, the Category E period changes too. In that case, the VAT201 return covers a shorter or longer period, and the due date is calculated from the new year-end.
For all other VAT vendors, nothing changes.
A Practical Example: What Happens in Real Life
A mining company (Company A) was acquired in October 2024 by a holding company with a 30 June year-end. Company A applied to CIPC and then to SARS to change its financial year-end from 31 December to 30 June. Both approved the change, effective from the 2025 year of assessment.
How the years of assessment played out
The 2024 year ran normally, 1 January to 31 December 2024, completely unaffected by the change.
The 2025 year became a short six-month period, running from 1 January to 30 June 2025. This is the transition year.
From 2026 onwards, the year ran 1 July to 30 June, now fully aligned with the group.
What the short 2025 year meant in practice
Because the 2025 year of assessment was only six months, the first provisional tax payment was not required. Company A only needed to make one provisional payment for that year, due on 30 June 2025. An optional third payment could follow by 31 December 2025.
From 2026, the full two-payment cycle resumed, measured from the new July start date. The first payment fell on 31 December 2025 and the second on 30 June 2026.
For mineral royalties, the same transition applied. The MPR3 return for the short 2025 year was due 12 months after 30 June 2025, which is 30 June 2026.
The real risk for practitioners
If you did not realise the measurement point had shifted to the new year-end, you would have calculated the 2026 first provisional payment using the old December anchor date, and been six months late without knowing it.
What This Means for Practitioners
If you are advising a company that has changed, or is planning to change, its financial year-end, you need to do the following:
Confirm the CIPC approval date and the SARS-approved effective year of assessment for the change.
Work out whether the transition year is shortened or extended, and plan the return accordingly.
Recalculate all provisional tax due dates from the start of the new year of assessment.
Check whether the company is a Category E VAT vendor. If so, update the VAT201 submission cycle.
If the company pays mineral royalties, confirm the new MPR3 due dates.
A wrong due date on a provisional tax payment is not a small admin error. It triggers interest and penalties that fall squarely on your desk.
As covered in Stretch It, Shrink It, Bend It: The Financial Year-End is Yours to Twist, the CIPC process for changing a financial year-end is straightforward, but the tax consequences require careful management. This new BGR is the missing piece that tells you exactly what those tax consequences look like.
When Does This Apply?
The final ruling will apply from the date SARS publishes the final BGR, and it will remain in force until SARS withdraws, amends it, or the underlying legislation changes. The draft is currently open for comment. until 31 July 2026. Practitioners working with companies in transition now should apply the principles in this draft as SARS guidance, even before finalisation.