A significant shift in global taxation is now taking effect.

South Africa will implement the global minimum tax at a rate of 15% from the 2026/27 financial year. While this does not directly impact most small and medium-sized businesses, it marks a structural change in how multinational enterprises are taxed.

The objective is clear. Ensure large multinational groups pay a minimum level of tax in every jurisdiction where they operate.

The framework, developed by the OECD under the GloBE rules, targets profit shifting to low- or no-tax jurisdictions. Where income has been taxed below the agreed minimum, a top-up tax is applied to bring the effective rate to 15%.

South Africa has already enacted the required legislation, enabling SARS to apply this top-up tax to qualifying multinational groups.

The result is a broader and more balanced tax base.

By limiting aggressive tax planning across borders, the system is expected to increase local tax revenue. Current estimates indicate an additional R2 billion could be collected. Over time, this creates room to reassess the overall tax burden, including potential relief for individuals or more competitive corporate tax rates.

The rules apply to large multinational groups only.

Specifically, those with consolidated annual revenue of at least EUR 750 million in two of the preceding financial years. For these entities, the compliance requirements are extensive and highly technical.

The calculation of the tax introduces new layers of complexity.

The Income Inclusion Rule requires South African entities within a multinational group to account for their share of tax on low-taxed foreign income. In addition, the Domestic Minimum Top-Up Tax applies to local entities where South African operations fall below the minimum effective rate.

These mechanisms ensure that any gap between actual tax paid and the global minimum is addressed.

Compliance obligations are equally demanding.

Affected entities must register with SARS and submit a GloBE Information Return within prescribed deadlines. Notification requirements, reporting timelines, and filing obligations must all be met, even where no additional tax is ultimately payable.

The first reporting deadlines are approaching quickly, with initial filings due in 2026.

SARS has already taken steps to prepare.

Dedicated teams, system upgrades, and new eFiling functionality are in place to support the rollout. At the same time, increased scrutiny and detailed reporting requirements will place pressure on affected organisations.

This is not simply a tax change. It is a shift in global tax administration.

For businesses within scope, the cost of compliance will increase. Specialist input will be required to navigate the rules, manage reporting, and ensure accuracy across jurisdictions.

For those outside the threshold, the impact is indirect but important.

A stronger, more consistent tax base reduces reliance on smaller taxpayers and contributes to a more stable fiscal environment.

The landscape is changing.

Understanding where your business fits, and preparing accordingly, will be critical as implementation moves from policy to practice.