Why SARS Is Rejecting Some Tax Returns Due to Retirement Fund Transfers

Why SARS Is Rejecting Some Tax Returns Due to Retirement Fund Transfers

This tax season, many taxpayers have been surprised to find that SARS is rejecting their tax return submissions because of a retirement fund transfer. The issue is not with the taxpayer instead it relates to how retirement funds report lump sum transfers to SARS.

What is a Recognition of Transfer (ROT01)?

Whenever a retirement lump sum is transferred from one retirement fund to another, the receiving fund must notify SARS by submitting a Recognition of Transfer (ROT01).

For example, if you resign from FNB and decide to transfer your pension benefit from the FNB Pension Fund to a retirement fund administered by Sanlam, Sanlam, as the receiving fund, must submit a ROT01 to SARS confirming that the transfer took place.

The same process applies to transfers involving other major retirement fund administrators such as Alexander Forbes, Old Mutual, Momentum, and others.

Why is this suddenly causing problems?

According to SARS, for many years, not all retirement fund administrators consistently reported every transfer to SARS. As a result, SARS often had incomplete records of retirement fund transfers.

From this tax season onwards, SARS has started enforcing this reporting requirement much more strictly. If SARS has not received the required ROT01 for a transfer, it may reject the taxpayer's tax return submission on eFiling until the retirement fund has submitted the outstanding information.

This change is aimed at improving compliance by retirement fund administrators rather than penalising taxpayers.

If this sounds familiar, you probably have seen this error message showing on your SARS eFiling Income Tax Workpage:

"Please note that your return cannot be processed immediately due to the fact that not all the required Recognition of Transfers (ROT) have been received in respect of the corresponding tax directives for this year of assessment. Please contact the Fund Administrator or Employer to rectify the error and resubmit the return."

What should you do?

If your tax return has been rejected because of a missing retirement fund lump sum transfer, you should:

1. Contact the receiving retirement fund (the fund that accepted your transferred benefit).

2. Ask them to confirm that they have submitted the ROT01 (Recognition of Transfer) to SARS for your transfer.

3. Request written confirmation once the ROT01 has been submitted.

4. Send that confirmation to us.

Once we receive the confirmation, we can refresh your retirement fund information on SARS eFiling and attempt to resubmit your tax return.

How long does SARS take to update?

Even after the retirement fund submits the ROT01, the information does not appear on SARS immediately.

It can take several days for SARS to process the submission and update your eFiling records. For example, if the fund confirms they submitted the ROT01 today, the updated information may only be visible on eFiling by the middle of next week.

For this reason, it is best to allow a few business days before attempting to resubmit your tax return.

We hope this helps, and if you followed these steps and are still unable to submit your ITR12 for 2026, please reach out to our Helpdesk team.