Subject to legislative approval, a Special Voluntary Disclosure Programme (SVDP) commenced on 1 October 2016, and is scheduled for a period of nine months ending on 30 June 2017. The SVDP is meant for individuals and companies who have not in the past disclosed tax and exchange control defaults in relation to offshore assets. It aims to encourage taxpayers to come forward on a voluntary basis to regularise their tax affairs with SARS and avoid the imposition of understatement penalties and other administrative penalties.
The SVDP is applicable to all taxes administered by SARS (excluding Customs and Excise). Any individual or company, as well as settlers, donors and beneficiaries of foreign discretionary trusts who want to voluntary disclose their tax affairs to SARS, provided they qualify for SVDP, may apply.
In order for an application to be valid, the following requirements should be complied with:
- The disclosure must be voluntary
- It must involve a default which had not previously been disclosed by the applicant or representative of the applicant (a representative can apply for SVDP on behalf of the taxpayer; they must both be registered on eFiling and the representative taxpayer must be linked to the tax types and profiles)
- It must be full and complete in all material aspects
- It must involve the potential imposition of an understatement penalty in respect of the default
- It must not result in a refund due by SARS
- It must be made in the prescribed form and manner – application on eFiling – SVDP01 form.
Should the application be approved, an agreement is concluded between SARS and the applicant that reflects the outcome of the application process. The average turnaround time per case is currently 16 working days.
To read the media statement issued by the National Treasury on 20 July 2016 click here.
For more information click here to view the DRAFT GUIDE: SPECIAL VOLUNTARY DISCLOSURE PROGRAMME issued by SARS.
Article by Sonja Hinrichsen, C2M Chartered Accountants Inc.