VDP and Interest Remittance: Practical Guidance Following SARS’ Updated VDP Guide

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VDP and Interest Remittance: Practical Guidance Following SARS’ Updated VDP Guide

• 21 July 2026
• Tax Administration
• Adv Christel van Wyk

The 2026 Budget Review signalled a welcome change for taxpayers looking to regularise historic tax defaults through the VDP. In principle, despite the Medtronic case in the Constitutional Court, taxpayers may now be able to pursue remittance of interest alongside a VDP application. This is provided the remittance request is made under the specific, relevant tax Act and is raised at the same time as the VDP application.

Getting the timing right is of significance because interest may make up a substantial part of the ultimate liability payable under a VDP agreement. This is in particular the case where an error comes to light several years after the relevant tax return was submitted. The issue for taxpayers is therefore not simply whether interest remittance is available, but exactly how to make sure the request is placed before SARS in the right manner and timeframe.

Why the Updated VDP Guide Created Uncertainty

SARS’ updated Guide to the Voluntary Disclosure Programme is helpful on the mechanics of a VDP application, including the use of eFiling. However, it does not address the process for an interest remittance request that is submitted alongside the VDP application. This gap leaves taxpayers and advisers looking for a practical way forward.

The silence in the Guide should definitely not be read as an indication that SARS intends to exclude these requests. A more likely explanation is the timing of the Budget Review and the timeframe within which the Guide was developed. The Guide appears to have been at an advanced stage when the Minister of Finance announced the proposed interest relief. It is highly likely that more specific, detailed guidance will follow once the legislation and SARS’ internal processes align with the policy announcement.

The Current Interim Position

In the meantime, the safest course is to treat the interest remittance request as part of the VDP strategy from the outset. A taxpayer submitting a VDP application on or after 1 March 2026 should explicitly state in the VDP application that the intention is to request the remittance of interest. The remittance request itself must still be made under the relevant tax Act and in the prescribed manner.

A taxpayer applying for VDP should therefore avoid treating the interest remittance as a matter to be dealt with only once the VDP agreement has been signed. Even if SARS ultimately considers the remittance request after conclusion of the VDP agreement, the taxpayer should be able to prove that the interest issue was raised upfront and directly linked to the VDP application.

This is also where a taxpayer should be deliberately cautious. The recommended approach is not to wait for SARS to issue perfect administrative guidance, but to create a clear contemporaneous record that the interest remittance request formed part of the VDP engagement from the beginning. That record may prove important if the timing or validity of the remittance request is later questioned.

How Taxpayers Should Submit the Interest Remittance Request

• eFiling Submission: Where the functionality is available, the taxpayer should submit a Request for Remittance (RFR) through eFiling or another recognised SARS channel. Once the RFR has been submitted, it would be prudent to email the VDP mailbox at vdp@sars.gov.za, quote the RFR case number, and ask SARS to link the request with the relevant VDP application.
• SARS Online Query System (SOQS): If the correct RFR option is not available on eFiling, the SOQS may be the most practical interim route. The taxpayer should in this case lodge a Request for Service (RFS), upload the supporting documents, and keep proof of submission. It may be sensible to also notify SARS through the VDP mailbox so that there is a clear record connecting the remittance request to the VDP matter.

What “Simultaneously” Means in Practice

The question arises as to what it means to simultaneously submit the interest remittance request. Until SARS publishes detailed instructions, it is not advisable to wait until after the VDP process is submitted. The interest remittance must be requested first through the relevant SARS channel. Best practice is to then flag the remittance request in the VDP application. That will clearly demonstrate that the taxpayer raised the issue before the VDP agreement was finalised and therefore submitted simultaneously.

Payment Obligations Remain Important

A taxpayer should not assume that a remittance request suspends payment. Unless SARS grants a suspension or other relief under the applicable rules, amounts due under the VDP agreement will remain payable. If SARS later grants the interest remittance, the taxpayer should then be entitled to a refund of the remitted amount through the ordinary SARS processes.

Practical Recommendations

• Submit the RFR through eFiling or another available SARS channel and retain proof of submission.
• Record the intention to seek interest remittance clearly in the VDP application.
• Email the VDP mailbox with the RFR case number and sufficient details to link the remittance request to the VDP application.
• Keep a complete audit trail of all submissions, case numbers, emails, and supporting documents.

Conclusion

For the moment, the interest remittance process in the VDP context is still developing. That is not unusual where a policy announcement precedes the detailed legislative and administrative machinery. But uncertainty should not translate into inaction. Until SARS issues improved guidance, a taxpayer should take a structured, documented approach, raise the issue in the VDP application, submit the RFR through the available SARS channels, and ensure the remittance request can be clearly tied back to the VDP matter. This is the most practical way to protect the taxpayer’s position while the formal processes settle.

Wish to Know More About This Topic?

Navigating the intersection of VDP applications and SARS interest remittance requires careful strategy and precise execution. If you would like to dive deeper into this topic and ensure your tax regularisation strategy is fully protected, join our upcoming live session.

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