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Tax Information Exchange Agreements Signed
The first agreement for the exchange of information relating to tax matters concluded by South Africa with San Marino took effect on 28 January 2012. In addition, Tax Information Exchange Agreements (TIEA) were concluded with Bermuda, Cayman Islands, Guernsey and Jersey and have taken effect. South Africa has concluded a large number of double taxation agreements with its trading partners which generally contain an article which authorises the exchange of information between South Africa and the treaty partner. Taxand South Africa discusses the recent Tax Information Exchange Agreement recently signed with San Marino and draws comparison with other recently signed TIEAs.
The Global Forum established a Peer Review Group to create the methodology and detailed terms of reference for the peer review process and decided that there would be two phases of that process. Phase 1 of the peer review process will examine the legal and regulatory framework in each jurisdiction and phase 2 will evaluate the implementation of the standards in practice. According to the schedule of reviews published by the Global Forum, South Africa was due to have been reviewed during the second half of 2011.
Taxand South Africa delves deeper into the details of the various Tax Information Exchange Agreements signed recently
The conclusion of the agreements for the exchange of information in tax matters is required so that South Africa can comply with its international obligations imposed on it as result of its membership with the Global Forum on Transparency and Exchange of Information for Tax Purposes. It will be interesting to see the report published pursuant to the peer review conducted on South Africa and to see the extent to which South Africa has complied with the standards prescribed by Global Forum.
On 1 April 2012 the Minister of Finance released the South African Revenue Service Compliance Programme which identifies areas of the economy which will be targeted by SARS to ensure compliance with the fiscal laws of the country. One of the target areas identified in the Compliance Programme is high net worth individuals in the country and SARS has indicated that it will seek to obtain information regarding foreign assets and income derived abroad by high net worth individuals in accordance with the tax information exchange agreements concluded by South Africa and various countries.