Time running out to declare your undisclosed offshore assets
THE South African Revenue Service (Sars) reminds you that, if you have undisclosed assets overseas, you have until the end of this month to disclose them under its Special Voluntary Disclosure Programme (SVDP).
The programme, which came into effect in October last year, is “a window period for individuals and companies to regularise undisclosed or unauthorised foreign assets and associated income”.
If you don’t come clean, Sars is likely to catch up with you sooner rather than later.
Under the new global Common Reporting Standard for the automatic exchange of information between tax authorities, Sars says that, from September, it will regularly receive financial data about third parties from other tax authorities; hence the window period to the end of this month.
In a recent blog, Andrew Wellsted, a director of law firm Norton Rose Fulbright and the head of its tax team, says: “There have been a number of similar opportunities to regularise tax and exchange-control affairs in the past. We have seen two previous special amnesty opportunities – in 2003 and 2010 – and the permanent Voluntary Disclosure Programme (VDP), which came into force on October 1, 2012 and which does not have a termination date. The current SVDP is the latest special opportunity.
“Each amnesty or disclosure programme since 2003 has been more onerous compared with the previous opportunity,” Wellsted says. “While the current SVDP deal is not attractive to many applicants, it is unlikely that they will get a more favourable opportunity in future.”
Wellsted says there is pressure on jurisdictions around the world to fight tax evasion.
“The Foreign Account Tax Compliance Act, the Common Reporting Standard and other inter-governmental agreements mean there will be a free flow of financial information between jurisdictions shortly. Under the Common Reporting Standard alone, 101 jurisdictions have agreed to start automatically exchanging financial-account information, with over 1 300 relationships now in place.
“The social media and information age is also making it increasingly more difficult to hide accounts from Sars or the South African Reserve Bank,” Wellsted says.
The alternative to taking advantage of the SVDP is running the risk of being caught. If you are, the penalties will be far more onerous and there is also the possibility of criminal prosecution.
Wellsted advises taxpayers to take advantage of the opportunity afforded by the SVDP and to seek expert help.
“The SVDP is a complex process, and it is important that the submission is accurate and complete to achieve the benefits.”
For a detailed explanation of what the SVDP requires, and how it differs from the concurrent VDP, go to www.sars.gov.za > Legal > Voluntary disclosure programme > SVDP page