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SARS wants exchange of information treaties to include tax information

06 August 2015   (0 Comments)
Posted by: Author: Amanda Visser
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Author: Amanda Visser (BDlive)

The South African Revenue Service (SARS) wants to be able to share disclosed financial information with countries with which it has multilateral exchange of information agreements.

The ability to automatically exchange information with revenue authorities and with SA’s treaty partners would allow SARS to expand its tax base and help with tax investigations.

The recently published draft amendments to the Tax Administration Act cater for the introduction of common reporting standards developed by the Organisation for Economic Co-operation and Development.

Nedbank head of tax advisory and risk Piet Janse van Rensburg said financial institutions were already obliged to provide "third party" returns in terms of the Tax Administration Act.

"However, the returns submitted were for SARS’ purposes only, and not for the automatic exchange of information with other countries."

Mr Janse van Rensburg said the standards were needed to align the exchange of information processes between countries to assist them with tax revenue and tax investigations.

The information that has to be included on the return include the name of the account holder, their address and tax number, their account number, and the balance or value at the end of the reporting period, as well as the interest earned in that period.

Leon Coetzee, head of tax at FirstRand Group and board member of the South African Institute of Tax Professionals, said revenue authorities would use this information to ensure their taxpayers declared the income they earned in other countries.

SA has already negotiated, or is in the process of finalising agreements, with the Cayman Islands, Guernsey, the Isle of Man, Gibraltar, Liechtenstein, Monaco and the Marshall Islands, among others. Most of these countries have traditionally been considered "tax havens".

The exchange of information has however raised concerns about privacy and the threat of information falling into the wrong hands.

Mardelle Kelbrick, group head of tax at Standard Bank, said the bank was unable to comment on the security of information once it had been handed over to SARS.

"We are however comfortable that our internal processes ensure that the information within the bank is secure," she said.

Mr Janse van Rensburg said the Tax Administration Act dealt specifically with the confidentiality of an individual’s information when dealing with SARS.

"However, this question is far more complex and detailed when dealing with the exchange of information agreements," he said.

Provisions in the Protection of Personal Information Act (Popi) stipulate that information will not be transferred to another country if proper safeguards for the protection of the information have not been adopted.

However, Mr Coetzee said in terms of Popi, information provided to third parties in terms of statutory requirements was excluded from the rules.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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