South Africa: Legislation implementing Pillar Two global minimum tax rules enacted
Rules are effective for tax years beginning from January 1, 2024
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January 22, 2025
Legislation implementing the OECD’s Pillar Two global anti-base erosion (GloBE) model rules—the Global Minimum Tax Act—was signed by the president and published in the government gazette No. 51830 on December 24, 2024.
- The law applies to multinational enterprise (MNE) groups with global consolidated group turnover exceeding €750 million in at least two of the tax years preceding the reporting year and is effective for tax years beginning from January 1, 2024.
- The law provides for an income inclusion rule (IIR) payable by qualifying South African tax resident MNE groups on income from constituent entities (CEs) in foreign jurisdictions where the GloBE effective tax rate is below 15% and a domestic minimum top-up tax (DMTT) on the profits of foreign inbound MNEs with low-taxed CEs in South Africa.
The reporting and payment details in respect of the new GloBE rules are set out in the Global Minimum Tax Administration Act, which was signed by the president and published in the government gazette No 51884 on January 9, 2025, and provides for a “transition year” to allow for a smooth implementation process.
Read a January 2025 report prepared by the KPMG member firm in South Africa