The window period for disclosing foreign assets and applying for relief through the Special Voluntary Disclosure Programme (SVDP) closes on 31 August 2017.
Who may apply for the SVDP?
Individuals and companies
Settlors, donors, deceased estates or beneficiaries of foreign discretionary trusts (if they elect to have the trust’s offshore assets and income deemed to be held by and accrued to them)
Taxpayers who disposed of any foreign assets prior to March 2010 (special deeming provisions apply)
Who may NOT apply for the SVDP?
Persons who have been given notice of the commencement of an audit or criminal investigation in respect of foreign assets or foreign taxes
Where SARS has obtained the information under the terms of any international exchange of information procedure
Disclosure where it is argued that all or part of the seed money/subsequent deposits/funding of foreign assets are not taxable in South Africa or have already been taxed in South Africa (the normal VDP channel can be used in these cases)
Benefits of applying for the SVDP:
Only 40% of the highest value of the total of the aggregate of all assets outside South Africa derived from undeclared income and accumulated between or deemed to be between 1 March 2010 and 28 February 2015 will be included in the taxable income and subject to tax in South Africa
Undeclared income that originally gave rise to the assets mentioned above will be exempt from income tax, donations tax and estate duty liabilities (future income will be fully taxed and assets declared will remain liable for donations tax and estate duty)
Interest on tax debts arising from the disclosure will commence only from the 2015 year of assessment
Investment income and other taxable events prior to 1 March 2015 will be exempt from tax (future investment income will be subject to tax)
No understatement penalties will be levied where an application under the SVDP is successful
Other SARS administrative non-compliance penalty relief may apply
Where an application under the SVDP is successful, SARS will not pursue a criminal prosecution
Should you require any further information about SVDP, please contact our offices.