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Last Minute Tips For Getting SARS’ Tax Amnesty

Monday, 31 October 2011   (0 Comments)
Posted by: Author: Wayne Sorour
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Last Minute Tips For Getting SARS’ Tax Amnesty

Eligibility for the Voluntary Disclosure Programme ends this month

With the deadline being the end of this month, the clock is ticking for taxpayers to submit Voluntary Disclosure Programme (VDP) applications to SARS and the SA Reserve Bank with a view to putting their financial affairs in order if they owe tax on local assets or income, and by disclosing income and assets held offshore.

The VDP programme is an opportunity for substantial savings on interest and penalties that would otherwise be levied against tax transgressions.Non-compliant taxpayers had been given a 12-month period, until the end of October this year, in which to regularise their tax affairs.Under the VDP in the Taxation Laws Second Amendment Act,taxpayers who make full disclosure will still have to pay the outstanding tax they owe on assets or income, but they will benefit from interest , penalty and additional tax relief.

The programme gives individuals and corporates that took funds offshore illegally and those who defaulted on their tax affairs an opportunity to straighten their affairs with SARS.It also gives them a chance to regularise their affairs with the Reserve Bank in instances where there have been exchange control contraventions.Non-compliant taxpayers with money offshore should apply under the programmeand regularise their international investments.

Besides obtaining relief from penalties, additional tax, and interest, this will open the way to implement a proper investment strategy and financial plan that assesses and accommodates the individual's capacity for risk.Additional value from a formal analysis process would be the latest portfolio construction techniques to maximise available investment opportunities.

Among the requirements for a valid disclosure:
• There must be a voluntary, full and complete disclosure in all material respects;
• There must be a default;
• Either inaccurate or incomplete information was submitted to SARS, or the taxpayer failed to submit information which resulted in their being incorrectly assessed or an incorrect tax refund being paid;
• A penalty or additional tax would have been imposed had SARS discovered the default;and
• The disclosure must be made in respect of a default which occurred at least 12 months before the commencement of VDP.

A taxpayer may apply for the VDP unless they are aware of a pending audit or investigation into their tax affairs by SARS, or an audit or investigation which has commenced but has not yet been concluded. Provisions are,however, made for exceptions to this rule.

Looking beyond the closing of the current VDP on 31 October 2011, the 2011 Tax Administration Bill, expected to be enacted later this year, contains a permanent VDP providing relief to non compliant taxpayers, albeit on less favourable terms than the current VDP. The ongoing disclosure option does not apply to exchange control offences.

Source: By Wayne Sorour (Tax breaks)



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.

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