Taxand South Africa explains the Special Voluntary Disclosure programme.
In the 2016 Budget Speech, the Minister of Finance announced a last opportunity for South African resident taxpayers to regularise funds held abroad that are not known to the South African Revenue Service (SARS) or the South African Reserve Bank (SARB). Draft legislation was released during February 2016, and a subsequent draft was released during the course of April for public comment.
More recently, on 20 July 2016, the National Treasury released a further revised draft of the legislation dealing with the income tax aspects of the Special Voluntary Disclosure Programme (SVDP). Furthermore, on 13 July 2016, the SARB issued a circular dealing with the exchange control aspects of the SVDP. On 7 September 2016, the National Treasury announced further changes to the SVDP, which are dealt with in a number of articles.
It is important for prospective applicants to be aware of the implications and requirements relating to the SVDP and whether this VDP is suited to their needs, as opposed to the existing current Permanent Voluntary Disclosure Programme (Permanent VDP) contained in the Tax Administration Act, 2011 (TAA).
Applicants need to weigh up whether the SVDP is preferable to applying under the current rules set out in the Permanent VDP. Generally, the SVDP may be the preferred option but where the tax default relates to the non-disclosure, for a limited period, of foreign income derived by the taxpayer, the Permanent VDP may be less costly, depending on the applicant’s particular facts and circumstances.