Domestic transfer pricing: section 31 and SEZ companies

Tax Break: South African tax for professionals · Oct 29, 2026 · 14m

Does transfer pricing in South Africa still only apply to international transactions? The Taxation Laws Amendment Bill published on 21 October extends section 31 of the Income Tax Act to a domestic context for the first time, and this episode looks at where, how and why.

The episode starts with the transfer pricing concept itself: why a high-taxed and a low-taxed entity in the same economic unit have an incentive to shift profits, and the two ways mispricing typically achieves that, through undercharging for supplies or overcharging for deductible items such as service fees, interest and…