South Africa’s 2026 Pillar Two amendments: an Article-by-Article Analysis

South Africa’s April 2026 Pillar Two changes are concentrated in sections 63–65 of the Taxation Laws Amendment Act, 2026 and section 25 of the Tax Administration Laws Amendment Act, 2026.  They are targeted changes aimed at keeping South Africa’s domestic rules aligned with OECD Administrative Guidance. The main substantive change is that the June 2024 OECD Administrative Guidance is now specifically incorporated into the Global Minimum Tax Act and applies for fiscal years commencing on or after 1 January 2024. The main administration change is that affected South African entities must now apply for registration in addition to submitting, or arranging the submission of, a GloBE Information Return.

South Africa’s Pillar Two Regime

South Africa enacted the Global Minimum Tax Act, 2024 to introduce the GloBE rules and impose top-up tax, and the Global Minimum Tax Administration Act, 2024 to administer that regime from 1 January 2024. 

The original Global Minimum Tax Act adopted a dynamic-reference model. It defined “Administrative Guidance to the GloBE Model Rules” by listing the February 2023, July 2023 and December 2023 OECD guidance, and then included “any similar document subsequently released by the Inclusive Framework, as specified under section 23.” It also defined the “Commentary to the GloBE Model Rules” to include updates to that commentary released by the Inclusive Framework and specified under section 23. Section 23 allowed the Minister of Finance, by Gazette notice, to specify that Inclusive Framework documents would apply for the purposes of the Act, but the notice would lapse on the last day of the next calendar year unless Parliament provided otherwise.

April 2026 Changes

Article 1: Taxation Laws Amendment Act, 2026, section 63 – amendments to section 1 of the Global Minimum Tax Act

1.1 Insertion of the June 2024 Administrative Guidance

Section 63(1)(a) inserts a new paragraph (cA) into the definition of “Administrative Guidance to the GloBE Model Rules”. The inserted document is the OECD’s Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Two), June 2024. Section 63(2) provides that this amendment is deemed to have come into operation on 1 January 2024.

As such, the June 2024 Administrative Guidance is not just a document specified under a ministerial notice. It is expressly included in the statutory definition of Administrative Guidance to the GloBE Model Rules. Section 64, discussed below, then gives the June 2024 guidance a special effective-date rule for fiscal years commencing on or after 1 January 2024.

The practical effect is that the June 2024 guidance must be considered in first-year South African Pillar Two computations. The fourth set of Administrative Guidance covers deferred tax liability recapture, divergences between GloBE and accounting carrying values, allocation of cross-border current taxes, allocation of cross-border deferred taxes, flow-through and hybrid entity structures, and securitisation vehicles.

1.2 Amendment to the definition of GloBE Model Rules