In the context of the efforts by the SARS to close sophisticated tax loopholes, transfer pricing was specifically identified as one of the main areas of concern by the Minister of Finance, Pravin Gordhan, in his 2010 Budget Speech, together with cross-border schemes. The proposed changes to the South African transfer pricing rules were set out in the Draft Taxation Laws Amendment Bill, 2010, which was released for public comment by the National Treasury on 10 May 2010. This article considers the changes contemplated in this draft legislation.