What Changed in the SARS VDP Guide
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A client emails you on Monday morning. They found a 2022 VAT default in their books. R600,000. They want to use the Voluntary Disclosure Programme to clean it up. Before you fire up the VDP01, you need to know what SARS quietly changed in the rules on 21 May 2026.
On 21 May 2026, SARS published Issue 2 of its Guide to the Voluntary Disclosure Programme under the Tax Administration Act, 2011. The VDP remains what it always was: a structured route for taxpayers to come forward and disclose undeclared tax defaults in exchange for relief from understatement penalties, qualifying administrative penalties, and criminal prosecution. CIBA has covered the mechanics of how it works in How to Clean Up Tax Messes: Your Guide to VDP.
What changed in Issue 2 is not the spirit of the programme, but the perimeter around it. There are three changes that matter for every CIBA member running VDP work, and several smaller refinements worth knowing.
Change 1: A new statutory bar, and a new customs VDP on the way
This is the most structural change in Issue 2. Two related things have happened.
First, a brand new requirement has been added to section 227. To be a valid voluntary disclosure under the general VDP, the disclosure may now not "constitute an underpayment as defined in section 77Z of the Customs and Excise Act". This is the new section 227(g), inserted by section 22 of the Tax Administration Laws Amendment Act 4 of 2026.
Second, a brand new dedicated VDP for customs and excise has been created. A new Chapter XB has been inserted into the Customs and Excise Act by section 10(1) of the same Amendment Act. The customs VDP will come into effect on a date still to be fixed by the Minister of Finance in the Government Gazette.
It is important to be precise about what has, and has not, changed.
Customs and excise have always sat outside the general VDP under Chapter 16 of the Tax Administration Act. The guide itself confirms that "the VDP is applicable to all taxes administered by SARS, except for the customs and excise legislation". What Issue 2 does is make that exclusion a hard statutory requirement under section 227(g), rather than leaving it to interpretation. Any future application that tries to roll a customs or excise underpayment into a general VDP will fail on the face of the legislation.
The scope of "duty" under the new section 77Z is wide. It covers customs duty, excise duty, air passenger tax under section 47B of the Customs and Excise Act, environmental levy under Chapter VA, the health promotion levy under Chapter VB, and the VAT levied under section 7(1)(b) of the VAT Act on imported goods, as well as VAT on certain locally manufactured goods that attract excise, environmental, or health promotion levies.
For your practice, two practical consequences follow.
You now have two doors, not one. If you have clients in importing, exporting, manufacturing, logistics, fuel distribution, alcohol, tobacco, or sugar-tax products, a single disclosure that mixes income tax, VAT (on local supplies), and an import VAT or excise shortfall cannot be lodged as one application. The customs leg has to be ring-fenced and routed through the new Chapter XB process once it is in force.
There is a transition gap. Until the Minister gazettes a commencement date for Chapter XB, there is no formal voluntary disclosure route for a customs or excise default. Clients sitting on a customs underpayment today need advice on whether to wait for the customs VDP to open, or to engage with SARS Customs directly through the normal channels.
The other implication is operational. The customs and excise VDP will be administered under the Customs and Excise Act, not the Tax Administration Act. The procedural rules, application forms, supporting documentation requirements, and relief structure will likely look different from the eFiling-based VDP01 process your practice is used to. Watch the SARS Customs page and the Government Gazette for the commencement notice, and budget time to learn the new process when it lands.
Change 2: Once you sign, you sign. Medtronic is now locked in.
Issue 2 embeds the Constitutional Court's 2025 judgment in CSARS v Medtronic International Trading S.A.R.L. (2025 (2) SA 337 (CC)). The ruling is now part of the guidance, not just persuasive case law sitting on a database somewhere.
Medtronic concluded a voluntary disclosure agreement and paid the agreed interest. After signing, the taxpayer tried to apply for remission of interest separately, under section 39(7) of the VAT Act. SARS refused. The High Court agreed with SARS. The Constitutional Court confirmed it. The Court held that allowing a taxpayer to "undo one of the material terms agreed to" through a back-door remission application would destabilise the entire VDP framework. The principle is pacta sunt servanda: agreements must be honoured.
The practical takeaway sits at the centre of Issue 2. Once a VDP agreement is signed, it is final and binding. You cannot come back later asking for interest remission under section 39(7) of the VAT Act or section 89quat of the Income Tax Act, or any other "side-door" route. The number you sign for is the number you pay.
That puts a much higher premium on getting the numbers right at signing. As VDP Isn't a Get-Out-of-Jail Card Unless You Get It Right flagged earlier this year, sloppy VDP submissions are now substantially more dangerous than they used to be. Issue 2 just made that worse.
Change 3: The "voluntary" test is tighter than ever
Issue 2 brings together three cases that together define when a disclosure is genuinely "voluntary": Reed v Minister of Finance (2017), Purveyors South Africa Mine Services (Pty) Ltd v CSARS (2022), and Cart Blanche Marketing CC v CSARS ([2020] 4 All SA 434 (GJ)).
The combined principle is this. A disclosure is only voluntary if the taxpayer comes forward unprompted, of their own free will, and without any SARS action that triggered the disclosure. SARS does not need to have launched a formal audit for "voluntary" to fall away. A SARS auditor "looking into" a taxpayer's affairs informally, an inspection, a verification on an adjacent year, or even an informal engagement where the taxpayer fishes for SARS's view on a default, all of these can disqualify a later VDP application.
Three nuances Issue 2 makes explicit:
Inspection and verification are not "audits". Only a formal audit (Notification of Audit letter under section 42) automatically triggers the section 226(2) disqualification. But if a verification or inspection causes the taxpayer to "discover" a default, the disclosure of that default fails the "voluntary" test under section 227(a). The door closes either way.
SARS's power to select for audit is almost unlimited. Cart Blanche Marketing confirms that the threshold for SARS to invoke section 40 (selection for audit, verification, or inspection) is "extremely low". Once SARS selects you, the practical window to apply for VDP shrinks fast.
"Looking into" counts. If a SARS official is informally probing a taxpayer's affairs and the taxpayer becomes aware of it, a subsequent VDP application is at high risk of being rejected. Reed and Purveyors together make this clear.
Other refinements worth knowing
Issue 2 also tightens or clarifies a number of other points:
Net position across periods.
Where a VDP covers multiple tax periods (for example, several VAT periods), the test for whether there is an "understatement" is the net of all the periods. If the net result is a refund, the application is dead. Issue 2 confirms that splitting periods to dodge the refund bar is not allowed.
Nil returns to game the system.
If a taxpayer submitted nil returns or minimal-value returns specifically to keep the returns "submitted" so a VDP can later be made, the VDP Unit will reject the application. This is a direct anti-avoidance statement.
Estimates are allowed where records are gone.
Where records have prescribed under section 29(3)(a) and are no longer available, the VDP Unit may accept reasonable estimates supported by other documentation. This is helpful for older defaults.
21 business days for late registration.
Where the default is failure to register for a tax type, the general practice is to allow 21 business days from registration to submit the VDP application. Extensions are possible by arrangement.
What VDP relief actually covers.
Issue 2 confirms the table: relief on understatement penalties (column 5 or 6 of the section 223 table), 100% relief on most administrative non-compliance penalties under Chapter 15, and no criminal prosecution for the disclosed default. Late-submission penalties are not relieved, and interest is never waived.
What to do this week
Five practical moves for any CIBA member.
Review your live VDP files.
If you have any open VDP application that touches customs duties, excise, environmental levies, or import VAT, get advice on whether the new section 227(g) requires you to split or restructure the application before submission.
Rebuild your client intake checklist.
Add three questions up front: has the client received any SARS notice (any kind), has any SARS official "looked into" their affairs informally, and does the disclosure touch any customs or excise duty.
Price the work for the new risk.
With Medtronic locked in, the cost of getting the numbers wrong on signature is much higher. Your fee for VDP work should reflect that risk and the depth of preparation now required.
Document everything.
Issue 2 places the onus on the applicant to satisfy SARS on every requirement. A full audit trail of how you arrived at the numbers, what records were available, and what estimates were used is no longer optional.
Get advice early on borderline cases.
Section 228 still allows a non-binding private opinion from a senior SARS official on whether a person is eligible for relief, without identifying the party. This is underused. For high-value or complex defaults, this is the right starting point.
The bottom line
The VDP is still open, and SARS still wants taxpayers to use it. The R3.3 billion the programme brought in during 2023/24 (covered in CIBA's piece on SARS Voluntary Disclosure Programme Brings in R3.3 Billion) tells you SARS still sees it as a core compliance tool, and the new Commissioner has explicitly signalled tougher enforcement against those who do not come forward.
But Issue 2 makes three things clear. The exclusion of customs and excise from the general VDP is now hard-coded in statute, and a separate customs VDP is on its way. Once you sign a VDP agreement, you cannot un-sign it. And the "voluntary" test is wider and tighter than most practitioners realise. The clients who get this right will save themselves real money. The ones whose accountant gets it wrong will pay twice: the original liability and the penalties the VDP was meant to relieve.