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News & Press: SARS operational & eFiling questions

Can one apply for VDP to deal with submitting outstanding VAT returns?

23 March 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: I was approached by a client to assist with submitting his outstanding VAT returns. Must he apply for VDP? If so, how? What is the best way to tackle this?

A: If a vendor does not submit a return (we assume the VAT201) it is a criminal offence – refer to section 234(d) of the Tax Administration Act.  If amounts were due to SARS and were not paid, the vendor will also be liable for the late payment penalty (a percentage based penalty – refer to section 213 of the Tax Administration Act).  The last penalty can’t be waived under a voluntary disclosure application – section 229(c). 

For purposes of a voluntary disclosure as default is defined as the failure to submit information where such non-submission resulted in the correct amount of tax not being paid – section 225(b). 

It would certainly be in the best interest of the client (taxpayer) to go the voluntary disclosure route.  The application form is called the Voluntary Disclosure Application Form (VDP01) and can only be accessed via the SARS eFiling system.  There is a guide on the SARS web (which can be accessed at http://www.sars.gov.za/AllDocs/OpsDocs/Guides/GEN-VDP-02-G01%20-%20Application%20for%20Permanent%20Voluntary%20Disclosure%20-%20External%20Reference%20Guide.pdf) .

Outstanding tax returns that relate to a VDP application can be submitted to SARS through normal channels at any time before the VDP application is processed.  If the return is assessed by SARS before the VDP application is processed, interest and penalties that are eligible for VDP relief will be waived when the VDP application is processed and a VDP agreement concluded.  The SARS debt collection division is aware of this and will refrain from instituting collection steps on eligible interest and penalties until the VDP application is finalised. 

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.

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