Special Voluntary Disclosure Programme: It’s Now Or Never!
“It’s Now or Never … Tomorrow will be Too Late” (Elvis Presley)
The recent revelations of the Panama Papers confirm a growing trend – it’s getting mighty difficult to hide money from the taxman or Reserve Bank. In the current Social Media and Information age, embarrassing data just keeps slipping out.
This makes it more important than ever for anyone needing to regularise their tax or exchange control affairs to understand and consider the proposed new Special Voluntary Disclosure Programme.
The Voluntary Disclosure Programme (VDP)
In 2003, the VDP was introduced. It is estimated that between R3 to R7 billion has been recovered by the authorities. A further VDP was introduced in 2010.
The proposed new Special VDP (SVDP)
The Special VDP was announced by Finance Minister Pravin Gordhan in the Budget speech. It will run from 1 October 2016 to 31 March 2017.
- Who are being audited or about to be audited in connection with offshore assets or taxes
- Who are Trusts. But settlors, donors, deceased estates, or beneficiaries of foreign discretionary trusts may take part if they agree to deem they hold the trust’s offshore assets and income
- Who are in the position that the information comes to SARS in terms of an international agreement.
Is it worth going for?
The Finance Minister has made several changes to the new programme.
- Investment income and interest payable to SARS will only be applied after 1 March 2010.
- Only 50% of funds used to establish offshore accounts (prior to 1 March 2015) will be included in taxable income. According to SARS, this applies if the funds were not previously taxed, but there is uncertainty as to how this will work in practice. Hopefully this will be clarified when the legislation is finalised.
- There will be no understatement penalties.
- No criminal prosecutions.
Seek expert help as this is a complex process and you will only get the benefit of it if your submission is accurate and complete.
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