The South African Minister of Finance, in his February 2016 Budget Speech, announced a Special Voluntary Disclosure Programme (SVDP). It is a final opportunity for non-compliant South African (SA) taxpayers with undisclosed assets abroad to voluntarily disclose and regularise their offshore assets and income (similar to 'Project DO-IT' undertaken by the Australian Tax Office (ATO) a number of years ago.)
The SVDP is a 'joint process' between the SA Revenue Service (SARS) and the SA Reserve Bank’s Financial Surveillance Department (SARB FinSurv). It allows the regularisation of both historical 'tax defaults' (vis-à-vis SARS) as well as Exchange Control (Excon) contraventions (vis-à-vis SARB FinSurv). The application window runs from 1 October 2016 until 31 March 2017.
The final SVDP legislation is currently being prepared. KPMG South Africa is liaising closely with SA National Treasury, SARS and SARB FinSurv to shape the upcoming SVDP regime.
The implementation of the OECD’s new global standard for the Automatic Exchange of Information between tax authorities means that SARS and the ATO will soon be receiving detailed information regarding South Africans’ 'unauthorised assets' held offshore, as well as (hitherto undeclared) income earned overseas. Hence the Minister’s warning that “… time is now running out for [South African] taxpayers who still have undisclosed assets abroad.”
In my former life as a Senior Specialist with SARS, I started the original Voluntary Disclosure Programme (VDP) in SA during 2010/11. This experience has given me invaluable insight into the both the VDP and the proposed SVDP.
South Africans in Australia that could be affected, and should consider the SVDP, are those that are still being regarded as tax resident in SA, or alternatively have remained Excon residents for SA purposes. This is because, many South Africans currently in Australia, have merely 'relocated' Down Under, without formally emigrating from SA.
For more detail regarding the upcoming SVDP, please get in touch.