Special voluntary disclosure programme: no time to waste
06 May 2016
Posted by: Author: Nel Schoeman
Author: Nel Schoeman (Moneyweb)
A window of opportunity for taxpayers to regularise their offshore affairs.
The Special Voluntary Disclosure Programme (SVDP) announced by the Minister of Finance in his Budget speech in February 2016 will be a joint tax and exchange control (Excon) process and will be open for a six-month period from October 1 2016 to March 31 2017.
It serves as a final window of opportunity for taxpayers to regularise their offshore affairs before the tidal wave of reporting in terms of the OECD Common Reporting Standard reaches the South African Revenue Service (Sars) from 2017 onwards.
Regularising under the SVDP programme would in most cases result in the applicant’s overall cost of compliance – for both tax and Excon – being half of what it would have been had the applicant regularised under the current voluntary disclosure programme (VDP) and Excon regimes. The SVDP could therefore, in broad terms, be said to have brought about an additional 50% relief – a concession welcomed by many.
The sting in the tail, however, is that if the assets concerned are in a trust, then the applicant has to elect that the assets be treated as their own for all tax purposes (which, unlike the 2003 Amnesty, will include estate duty).
On the tax side, the disclosure period for income and gains on offshore assets (that is, the return on investment) has been limited to five years, from March 1 2010 until February 28 2015. The 2016 year is not included, as the annual tax returns for 2016 would be submitted at the end of February 2017 only, and would reflect the offshore income and assets that would already at that stage have been disclosed under the SVDP.
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This article first appeared on moneyweb.co.za.