Major Changes Coming to SARS Diesel Refund System

SARS is introducing a new standalone Diesel Refund System which will ultimately move diesel rebate claims away from the VAT201 return.

The first phase is now being rolled out and all existing diesel refund users will have to register on the new system. Existing registrations will not automatically transfer.

Importantly, diesel suppliers will also have to register with SARS. Under the new system, users will establish electronic relationships with their diesel suppliers, allowing SARS to verify the diesel purchased and the parties involved in a refund claim.

This means businesses claiming diesel refunds should pay particular attention to where they purchase their diesel. Once the new system becomes fully operational, diesel purchased from suppliers who are not appropriately registered may not qualify for the refund.

The system is being introduced in phases. SARS will progressively capture more detailed information regarding the taxpayer's qualifying activities, operating sites, equipment, licences and permits. For the time being, diesel refund claims must continue to be submitted through the normal VAT201 process. SARS will announce when the new standalone claims functionality becomes effective. The changes follow another important improvement introduced during 2026: qualifying on-land users in the farming, forestry and mining sectors can now claim a refund on 100% of eligible diesel used in qualifying activities, rather than the previous 80% limitation.

What should businesses do now?

Businesses currently claiming diesel refunds should start preparing immediately. MJB recommends that clients ensure their SARS entity information is correct, identify all diesel suppliers currently being used, confirm that those suppliers are preparing for registration, and ensure that diesel usage records and logbooks are properly maintained.

The move to a standalone system should ultimately make diesel refunds easier to track, but it will also give SARS significantly greater visibility over diesel purchases and claims.

Professional Accountants can assist existing and new diesel refund clients with the new SARS registration process and with ensuring that their diesel records and claims comply with the requirements of the Diesel Refund Scheme.