Find out more about Voluntary Disclosure in the South African context in the 4th edition of this publication.
This edition outlines changes in the administration and taxation of the Special
Voluntary Disclosure Programme (“SVDP”) for taxpayers who wish to regularize their offshore assets and related income in order to comply with regulations outlined by the South African Revenue Service (“SARS”) and the South African Reserve Bank’s Financial Surveillance Dept. (“SARB FinSurv”).
On Wednesday 24 February 2016, the Finance Minister, announced a Special Voluntary Disclosure Programme (“SVDP”) for taxpayers to regularize their offshore assets and the related income (hitherto undeclared to SARS).
The SVDP applies both to income tax defaults and Excon contraventions. South Africans holding unauthorised assets off-shore would be given a eleven month window to regularise past tax defaults and / or Excon defaults. The application window is from 1 October 2016 until 30 August 2017.
Regardless of the SVDP, taxpayers still have access to the VDP process as legislated (discussed in this document).
It is stated in the Budget Speech that “With a new global standard for the automatic exchange of information between tax authorities providing SARS with additional information from 2017, time is now running out for taxpayers who still have undisclosed assets abroad.”
The OECD’s Automatic Exchange of Information initiative accompanied by the Common Reporting Standards (“CRS”), sets the framework for sharing information between tax jurisdictions.
The reality is that detailed information about South Africans’ unauthorised assets held abroad, as well as the undeclared income generated by such assets, will soon become available to the South African authorities.
The timing of the Budget announcement of the SVDP therefore gives South Africans a once-off eleven month window to regularise historical tax defaults and / or Excon contraventions, i.e. prior to the information exchange taking place. Draft legislation was issued in February 2016 and April 2016. The latest draft bills as relates to the SVDP were published on 20 July 2016. The finalised bills were issued on 15 December 2016.
KPMG South Africa has assisted numerous clients with VDP applications relating to all qualifying taxes (income tax, employees’ tax, unemployment insurance fund liabilities, skills development levies, value-added tax).
KPMG is well placed to deal with regularization given
KPMG’s network enables us to provide international solutions, calling on our in-house specialists in South Africa, with knowledge of the local tax legislation as well as in respect of the Exchange Control Regulations. We have well established relationships with the offshore banks and work closely with KPMG Switzerland. Our practice is to have a single point of contact who is familiar with the client’s individual situation and who coordinates the process with the utmost discretion.
Download the 4th Edition to find out more.