Understatement Penalty Calculator
When SARS determines that you understated your tax liability, a penalty is imposed based on the type of behaviour — from 25% for a substantial understatement up to 150% for intentional evasion under jeopardy.
Understatement Penalty Rates
| Behaviour | Standard | VDP | Jeopardy |
|---|---|---|---|
| Substantial understatement (> 5% or > R1 million) | 25% | 0% | 50% |
| Reasonable care not taken | 25% | 0% | 50% |
| No reasonable grounds for tax position | 50% | 25% | 75% |
| Gross negligence | 75% | 35% | 100% |
| Intentional tax evasion | 100% | 75% | 150% |
Related Guides
SARS Understatement Penalties Explained: Rates, Behaviour & VDP
Understand SARS understatement penalties under Section 222. Full breakdown of penalty rates by behaviour type and how the VDP can reduce your exposure.
The Voluntary Disclosure Programme: How It Reduces SARS Penalties
Complete guide to the SARS Voluntary Disclosure Programme. Learn how the VDP can dramatically reduce understatement penalties and protect you from prosecution.
How to Reduce or Remove a SARS Penalty in 2026
Practical steps to reduce or remove SARS penalties. Covers remission requests, voluntary disclosure, and objection procedures.