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Clampdown on tax evasion

Monday, 30 November 2015   (0 Comments)
Posted by: Author: Ingé Lamprecht
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Author: Ingé Lamprecht (Moneyweb)

As Common Reporting Standard (CRS) comes into operation.

South Africans with undeclared offshore funds may only have a few months to get their affairs in order or risk facing significant penalties and even criminal prosecution as revenue authorities start the automatic exchange of information.

The Common Reporting Standard (CRS), a set of global standards that govern how tax authorities in participating countries share information about the financial assets of their taxpayers, comes into operation from next year.

South Africa is one of the "early adopters” of the CRS. Other signatories include Luxembourg, Liechtenstein, Malta, Cyprus, the UK, Isle of Man, Guernsey, Jersey, France, Germany, Greece, India, Ireland and Italy to name a few.

Judy Snyman, fiduciary specialist at AlphaWealth, says the group of countries who signed up as early adopters will start collecting information in January 2016 with the intention to share the information from September 2017 onwards.

The late adopters, which include countries like Switzerland, Hong Kong, Singapore, Monaco, the Bahamas, Australia, New Zealand and Canada, will start gathering information in January 2017 and disclose it sometime during the next year. More than 70 countries have signed up so far.

The CRS was compiled by the Organisation for Economic Co-Operation and Development (OECD) on behalf of the G20 countries. The parties were of the view that base erosion and profit shifting was a growing problem and wanted to ensure that they could access the tax revenue on all of the assets held offshore by their taxpayers, Snyman says.

While governments generally perceive the offshore assets of their taxpayers as a significant opportunity to increase tax revenue, this can only be done if the taxpayer discloses these accounts or if financial institutions provide authorities with the data.

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