Search:  
Western Cape Business News
674
VIEWS

Send  Share  RSS  Twitter  07 Oct 2016

FINANCE: â€‹Window for Special Voluntary Disclosure Of Offshore Assets Has Opened

 



Recent Western Cape Business News

The window period for the Special Voluntary Disclosure Programme (SVDP) offered by SARS to South African taxpayers for the disclosure of offshore assets has started and the clock is ticking.

SARS and the SA Reserve Bank (SARB) have created this SVDP window period from 1 October 2016 to 30 June 2017 to give non-compliant taxpayers the opportunity to voluntarily disclose offshore assets and income and so regularise their tax and exchange control affairs, according to Ilsa Groenewald, Associate Tax Director at the Durban office of BDO South Africa.

The special VDP would run concurrently with the permanent SARS VDP with SARS and SARB working together to evaluate and process all applications through a single point of entry, which would be the SARS e-filing VDP application process.

“There are three significant incentives to encourage taxpayers to apply for relief under this special VDP relating to offshore assets and income,” she said.

“Interest accrued on offshore assets will only be charged from 1 March 2010 onwards. If the application is successful, no under-statement penalties will be levied and SARS will not pursue criminal prosecution for this tax offence.”

“Also, only 50% of the total amount applied for will be included in the taxpayer’s taxable income and subject to normal tax rates.”

The special VDP was open to individuals and companies. Trusts did not qualify but settlors, donors, deceased estates or beneficiaries of foreign discretionary trusts were eligible if they elected to have the trust’s offshore assets and income held by them.

If SARS was aware of a pending audit or investigation in respect of anyone’s foreign assets or foreign taxes, they would not be eligible to apply for the special VDP, Groenewald said. SARS would, however, consider a VDP application if the scope of the audit was for a different tax such as PAYE.

“An important point to consider is that the global standard for the automatic exchange of information between tax authorities will be activated in the 2017 tax year and any assets which SARS becomes aware of via this system will not qualify for the special VDP.”

Groenewald explained the levies that would be charged on the assets declared. “These will be 5% of the leviable amount if the funds are repatriated to South Africa and 10% if they are kept offshore, based on the current market value as at 29 February 2016.”

“The levy must be paid from foreign-sourced funds. Those wanting to pay the levy from South African sourced funds will be charged an additional 2% of the leviable amount,” she said.

“It will not be possible for individuals to deduct their R10 million foreign capital allowance, or any remaining portion of it, from the leviable amount. The levy may also not be reduced by any fees or commission.”

The final settlement amount would depend on whether the applicants chose to repatriate their funds or retain them overseas.

Anyone wishing to voluntarily make a full disclosure directly to SARB’s Financial Surveillance Department (FinSurv) outside the framework of the special VDP, would have to pay a settlement ranging from between 10% and 40% of the current market value of their unauthorised foreign assets.

If SARS and FinSurv discover any undisclosed assets belonging to a South African taxpayer who has not applied for the special VDP, they will face the full force of the law, Groenewald warned.

“It is clear that the authorities are encouraging South African taxpayers to invest in their country,” she added.

“With SARS and SARB working together in a joint one-point process, the current VDP01 form has been enhanced to accommodate the SVDP tax-related disclosures, while a second SVDP01 form is available for exchange control disclosures. Both forms will be available on-line on the SARS e-filing platform,” she said.

Tax related disclosures would be routed to SARS staff and assessed on the same basis as the current VDP process. Exchange control SVDP disclosures would be routed to SARB SVDP Unit staff and dealt with in terms of the Exchange Control Regulation 24 and the Exchange Control circular no6/2016 dated 13 July 2016.


 
 
 
lighting-and-design-cape-towninsurance-brokers-cape-townsolid-wood-furniture-western-capeorganic-products-weatern-cape
 
   
 
 
 
  Accomodation
Accommodation


Online Foreign Exchange
Foreign Exchange


Directory
Directory


Fax
Fax 2 Email


Finance
Finance


Furniture
Furniture


Casino
Online Casino


Restaurant
Restaurant


Auctions
Shop Online


Study IT
Study IT Online


Web design
Web Design


Weddings
Weddings


Work
Work from Home
 
 
 
 
 
Company News
 
 

 

© 2018 www.wcbn.co.za. All rights reserved.

Daily Newsletter Subscription

 

Subscribe to the Western Cape Business News Daily News and information email (it's free).

Thank You
Your email address has been added.

Name:
Email Address: