SARS penalty remission and penalty dispute assistance
SARS raises several different kinds of penalty, and each has its own remedy. This page separates administrative, late-payment and understatement penalties, explains the initial identification and applicable remedy for each, and treats interest as a linked but distinct issue. It is about the right remedy for the right penalty - not blanket penalty negotiation.
Not every penalty can be removed - and the remedy depends on the type
SARS penalties are not interchangeable. Administrative, late-payment and understatement penalties each follow different rules, and using one remission ground for all of them does not work. The first step is always identifying which penalty you actually have.
Three penalty types, three different remedies
The notice or statement of account shows the penalty category. Start here - the remedy follows from the type.
| Penalty type | What it is | Applicable remedy |
|---|---|---|
Administrative (non-compliance) penalties | Fixed-amount penalties triggered by a specific non-compliance, such as failing to submit a return. | Remission may be available through a request for remission, depending on the circumstances. This is the penalty type most commonly linked to outstanding returns. |
Late-payment penalties | Percentage-based penalties arising from late payment of tax owed. | Treated as a linked but distinct issue. Where the underlying tax is undisputed, remission or Agreed Payment of Instalments arrangements may be relevant - but the tax itself remains payable. |
Understatement penalties | Percentage-based penalties that can apply where a taxpayer understates tax, often following an audit or understatement finding. | Not addressed by a blanket remission request. Depending on the facts, an objection or remission on specific grounds may be relevant. This is closer to a dispute than a routine waiver. |
Identification first, then the applicable remedy
Before any submission is prepared, the penalty is identified and the correct remedy chosen. Skipping this step is the most common reason a remission request fails.
- 01
Identify which penalty type you have
The notice or statement shows the penalty category. The remedy depends entirely on the type - administrative, late-payment or understatement - so this is identified before anything is submitted.
- 02
Check whether returns are the root cause
Administrative penalties often follow unfiled returns. If so, remission alone is not the whole answer - the returns usually need to be brought up to date as well.
- 03
Determine the applicable remedy
For some penalties a request for remission may apply; for others, an objection is the correct route. Using one remission ground for all penalty types does not work.
- 04
Treat interest separately
Interest is a linked but distinct issue. Reducing a penalty does not automatically reduce interest, and the two are addressed through different mechanisms.
Reducing a penalty does not automatically reduce interest
Penalties and interest are separate amounts with separate mechanisms. A successful penalty remission or objection addresses the penalty; it does not automatically wipe the interest that has accrued on the underlying debt. Interest is reviewed on its own merits, as a linked but distinct part of the matter.
Why this matters: a taxpayer can have a penalty reduced or remitted and still owe the underlying tax plus interest. Treating the whole balance as one negotiable number usually leads to a request that targets the wrong amount. The assessment separates tax, penalty and interest so each is addressed by the right mechanism - and interest remission is reviewed as a linked but separate question.
What penalty remission is - and is not
What penalty remission work involves
- Identifying the specific penalty type from the notice or statement of account.
- Determining the correct remedy - remission, objection or another route - for that type.
- Checking whether outstanding returns are the root cause and need correcting too.
- Preparing a submission that fits the applicable remedy, only after a written scope is agreed.
What penalty remission is not
- Blanket penalty negotiation. Different penalty types need different remedies.
- A guarantee that any or all penalties will be removed. Remission is discretionary.
- A reduction of the underlying tax. Penalties and tax are separate amounts.
- Automatic. Outstanding returns, the penalty type and the circumstances all affect whether remission applies.
Questions about SARS penalty remission
Which penalty do I have?
The notice or statement of account shows the penalty category. The three common types are administrative (non-compliance) penalties, late-payment penalties and understatement penalties. Identifying the type is the first step, because each follows a different remedy. The assessment reads the notice and places the penalty in the right category before any submission is prepared.
Can all penalties be removed?
No. Remission is discretionary and depends on the penalty type and circumstances. Some penalties may be remitted on the appropriate grounds; others - particularly understatement penalties - are closer to a dispute and may require an objection rather than a routine remission request. Anyone offering to remove all penalties before reviewing the facts is overpromising.
Must outstanding returns be corrected too?
Often, yes. Administrative penalties frequently follow unfiled returns, and remission alone does not address the underlying non-compliance. Bringing the returns up to date is usually part of the remedy, not a separate afterthought. The assessment checks whether outstanding returns are the root cause before a penalty submission is prepared.
I already paid the penalty. What should I prepare for a review?
Keep the penalty notice, payment proof, any earlier request or decision, and a timeline of events. These help establish whether a review route remains available for that penalty and period. Payment does not itself demonstrate that a refund is due. The request for remission guide and the penalty types guide explain the distinctions without promising that every paid penalty can be reclaimed.
Identify your penalty type and the right remedy
A confidential assessment reads the notice, separates tax, penalty and interest, and maps the correct remedy for the penalty type. No documents or passwords are required to begin.