As you know, the due date for disclosures of foreign bank or investment accounts is 12 August 2015.
Many of the applications received thus far are unnecessarily complicated by, for example, submitting separate applications for each tax period. While this is not incorrect, the process followed by tax practitioners can be more efficient by adhering to the following guidelines:
If the information relating to the amount of the disclosure is not yet completely available (for example all of the account statements are not yet available), complete the VDP01 with estimates of the amounts. Continue the process of gathering the outstanding information subsequent to the application, so that when the tax practitioner is contacted by the VDP evaluator, arrangements can be made to replace the estimate with the actuals.
It is not necessary to file a separate VDP application for each tax period. The VDP application form (VDP01) makes provision for different tax periods and all the tax periods can therefore be completed on one application form.
It is not necessary to send a copy of the application to the VDP e-mail address. Once filed on eFiling, the application is automatically registered and is transferred directly to the VDP unit.
If some of the supporting documentation cannot be uploaded via eFiling, keep these records on the client’s file and submit the supporting documents and additional information when the VDP evaluator makes contact with the tax practitioner.
The VDP01 application form is the official application form, which means that it is not necessary to repeat the application in a separate document or letter. However, it is important to complete all the required fields on the VDP01.
VDP applications for non-binding opinions (so-called anonymous applications) are not regarded as a formal VDP application for purposes of meeting the deadline of 12 August 2015.
The VDP application form makes provision for a short description of the nature of the default. For foreign account disclosures, enter a short description like ‘XYZ Bank account interest earned’ (or whatever the nature of the disclosure is).
Make sure that the correct source code is used on the VDP01 application form. The main source codes for foreign income are:
FOREIGN INCOME - TAXABLE
FOREIGN SHARE OPTION EXERCISED
FOREIGN ACQUISITION OF ASSETS LESS THAN
OTHER FOREIGN INCOME-TAXABLE
FOREIGN CAPITAL GAINS - PROFIT
FOREIGN ROYALTIES - PROFIT
We trust that this will be of assistance to tax practitioners.
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.
MINIMUM REQUIREMENTS TO REGISTER
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.