South Africans With Accounts And Investments In Foreign Tax Jurisdictions

The South African Revenue Service announced on 09 July 2015 the progress made by SARS on work done on foreign bank accounts held by South African residents and to provide such residents an opportunity until 12 August 2015, to approach SARS via its Voluntary Disclosure Programme (VDP) to regularise their tax affairs.

The VDP process is not nearly as simplistic as one may think and there is significant risk on where the voluntary disclosure is not accepted by SARS, due to various substantial or factual reasons. We specialise in the VDP process and which is the only legislated enabled route to ensure full compliance and correcting wrongs of the past. We are also one of the few tax advisories which fully appreciates the risks around offshore trusts, offshore structures and correcting the aggressive advice often given by certain offshore advisors making a living from these structures. Our approach is ensuring becoming fully compliant with the law, without unduly paying tax or penalties.

During February 2015, various media articles referred to the release of information pertaining to South African residents who are or were HSBC account holders. As stated by SARS at the time, early indications were that some account holders may have utilised their accounts to evade their local and/or international tax obligations based on the information SARS had received. The SARS announcement further reads:
“SARS has completed the initial phase of matching information obtained through international exchange of information procedures with the SARS taxpayer database. This matching confirms that some account holders may have used their accounts to evade South African tax liabilities. Account holders who want to make use of the VDP are encouraged to submit their applications to the VDP unit on or before 12 August 2015. In the meantime SARS will continue analysing the data available to it, enhancing its audit capacity and will be ready to commence issuing audit notification letters from 13 August 2015”.

Detailed information about the VDP application process as well as the penalty relief and protection against criminal prosecution provided under this programme is available at http://www.sars.gov.za/Legal/VDP/Pages/default.aspx.