A brown envelope from SARS — or more likely, a notification that sits unread in your eFiling inbox for three months — and then suddenly there is a penalty amount that bears no resemblance to any tax you owe. No underlying liability. Just penalties. This is a Section 210 administrative penalty, and for small business owners who fall behind on returns during a busy year, it is one of the most common unwelcome surprises SARS delivers.
The good news is that administrative penalties under Section 210 of the Tax Administration Act are among the most contestable assessments SARS raises. You do not need a dispute resolution specialist or a Tax Court date. Most first-time cases resolve with a single eFiling submission. Here is how it works.
What Is a Section 210 Administrative Penalty?
Section 210 of the Tax Administration Act (TAA) empowers SARS to impose a fixed monthly penalty for each month a return remains outstanding. The penalty has nothing to do with how much tax you owe — it is purely a non-compliance penalty for failing to submit a return on time.
SARS can raise a Section 210 penalty against you for any return type that has not been filed: an income tax return (ITR12 for individuals, ITR14 for companies), a VAT201, an EMP201, or a provisional tax return (IRP6). Each outstanding return attracts its own penalty schedule, and they run concurrently — so if you have an outstanding income tax return and an outstanding VAT return, both penalty clocks are ticking simultaneously.
The monthly penalty amount is determined by your assessed income in the most recent year SARS has assessed:
| Assessed Income | Monthly Penalty | |---|---| | R0 — R250,000 | R250 | | R250,001 — R500,000 | R500 | | R500,001 — R1 million | R1,000 | | R1 million — R5 million | R2,000 | | R5 million — R10 million | R4,000 | | R10 million — R50 million | R8,000 | | Above R50 million | R16,000 |
A single return at the R1,000 tier running 18 months accumulates R18,000 in penalties before a cent of tax is owed. Two outstanding returns at that tier over the same period: R36,000. The math compounds fast.
Common Triggers
The most frequent cause is straightforward: a return was not filed. This happens more often than people expect, and it is rarely deliberate.
A sole proprietor's ITR12 lapses because they assumed their bookkeeper filed it. A company's ITR14 is not filed because the previous accountant left mid-year and the handover was incomplete. VAT submissions fall behind during a cash-flow crisis when the business owner decided not to file because they could not pay the amount due — not realising that filing and paying are separate obligations, and the penalty for non-filing runs whether or not the payment is made.
SARS also raises administrative penalties under Section 210 for failure to register for tax when registration was required — though this is a narrower scenario.
One point worth understanding: SARS raises these penalties automatically, through a system process. The fact that a penalty was raised does not mean a SARS official reviewed your affairs and made a decision about you personally. It means a system flag triggered on a missing return. This matters when you approach remission, because the process is likewise largely administrative — structured and rule-bound, not discretionary.
How the Request for Remission Works (TAA Section 215)
Section 215 of the TAA gives taxpayers the right to request that SARS remit an administrative penalty. The mechanism is the Request for Remission (RFR), available on eFiling.
Here is the sequence:
Step 1 — File the outstanding return first.
SARS will not consider an RFR while the return remains outstanding. In practice, you should file the return and submit the RFR in the same session, or file the return first and submit the RFR immediately after. Do not attempt to negotiate the penalty before the underlying return is filed.
Step 2 — Locate the RFR on eFiling.
Navigate to the relevant taxpayer profile on eFiling. Under SARS Correspondence or the specific return type's account, look for the penalty assessment. The RFR option should appear alongside the assessment notice. Select it and follow the guided submission process.
Step 3 — State your grounds.
The RFR form asks you to explain why the return was not filed on time. SARS evaluates RFRs against a set of criteria set out in Section 215 and in the Tax Administration Guide. The submission does not need to be lengthy — it needs to be accurate and to connect your circumstances to the grounds SARS recognises.
What Makes a Strong RFR
SARS grants remission based on specific criteria. Understanding these helps you frame your submission properly.
First-instance non-compliance is the strongest ground. If this is the first time SARS has issued a Section 210 penalty for this specific return type on this specific taxpayer profile, SARS routinely grants remission on request — provided the return has been filed and the RFR is submitted promptly. This is the rule, not the exception. SARS's own guidance acknowledges that a first-time administrative penalty is remissible for a compliant taxpayer who has rectified the non-compliance.
Extraordinary circumstances are required if you have a prior penalty history. SARS accepts:
- –Hospitalisation, serious illness, or incapacity of the taxpayer or the person responsible for the submission
- –The death of a key person (sole director, sole signatory, accountant handling the submissions)
- –A natural disaster affecting the business premises or records
- –SARS system failure (where eFiling was unavailable during the filing period)
These grounds must be specific. "I was busy" or "the business was under financial pressure" does not meet the threshold. A medical certificate, death certificate, or SARS's own system downtime records should accompany the submission where relevant.
Prior compliance history matters even where extraordinary circumstances are argued. A taxpayer with a multi-year record of timely filings is treated differently from one with a pattern of late compliance. If your history is good, say so in the RFR. SARS can view this on their system — you are not asserting something they cannot verify.
Prompt remediation — filing the outstanding return quickly once the penalty is raised — strengthens the case. Waiting six months after receiving the penalty notice before filing and then requesting remission is harder to argue. Acting within weeks of the notice signals that the non-compliance was an oversight rather than a pattern.
If the RFR Is Denied: Formal Objection
An RFR is an administrative request, not a formal dispute. If SARS refuses remission, you retain the right to object to the underlying assessment under Section 104 of the TAA.
A Notice of Objection (NOO) must be filed within 30 business days of the assessment date — not the date the RFR was refused. This is the critical timing point: the RFR does not pause or extend the objection window. If you intend to dispute the penalty whether or not the RFR succeeds, note the assessment date immediately and calculate your objection deadline.
The NOO must specify the grounds of objection with particularity. A vague objection — "I dispute this penalty" — gives SARS grounds to refuse it without engaging the substance. The objection should address the specific legislative basis SARS used to impose the penalty and argue why the conditions for imposition were not met or why remission should have been granted.
When a Deferred Payment Agreement Is the Fallback
Sometimes remission is refused, the objection window has passed, and the penalty is confirmed. If the penalty amount is substantial and paying it in full creates cash-flow hardship, a Deferred Payment Agreement (DPA) is the practical solution.
A DPA allows you to pay the outstanding tax debt — including confirmed penalties — in instalments over an agreed period. SARS considers DPAs where:
- –The taxpayer is compliant with all current return filing obligations
- –The outstanding amount is genuine and not itself under dispute
- –The taxpayer can demonstrate ability to meet the instalment schedule
- –The taxpayer contacts SARS proactively rather than waiting for enforcement action
To apply, contact SARS on their debt management line or submit a request through eFiling. You will be asked to provide financial information to support the proposed instalment amount. Interest continues to accrue on the outstanding balance during the DPA period — this is a cost of the arrangement, not a waiver.
The most important thing about a DPA is the timing: applying before SARS escalates to enforcement (garnishee orders, bank account attachments) preserves significantly more negotiating room. Once enforcement has begun, the DPA option still exists but the process is less straightforward.
What to Do Right Now
If you have received a Section 210 penalty notice:
1. Note the assessment date — your objection window runs from this date, not when you read the notice 2. File the outstanding return — do this before anything else 3. Submit the RFR immediately — on eFiling, citing the grounds that apply to your situation 4. If you have multiple outstanding returns — file all of them and submit a single RFR covering all penalties, or separate RFRs per return type depending on the circumstances 5. Set a calendar reminder for the 30-business-day objection deadline — even if you expect the RFR to succeed
Getting advice before the 30-day window closes is worthwhile. A poorly framed RFR or a missed objection deadline can convert a contestable penalty into a confirmed debt unnecessarily.
At Sikatrix Business Accountants, we handle SARS administrative penalty disputes from the initial RFR through to formal objection and, where necessary, Alternative Dispute Resolution. If you have received a Section 210 penalty notice or are concerned about outstanding returns, [contact us for a free consultation](/contact) before the deadline passes.
References
- –[SARS: Tax Administration Act — Section 210](https://www.sars.gov.za/legal-counsel/legislation/acts/tax-administration-act/) — Administrative penalties for non-compliance
- –[SARS: Administrative Penalties](https://www.sars.gov.za/businesses-and-employers/outstanding-penalties/) — How penalties are calculated and when remission applies
- –[SARS: Dispute Resolution Guide](https://www.sars.gov.za/disputes/) — Objection and appeal process
*This article is for general information only and does not constitute legal or tax advice. Penalty deadlines are strict — if you have received an assessment, contact a [registered tax practitioner](/contact) before taking action.*
