Offshore assets must be disclosed before March to avoid penalties

By Anton Maskowitz, Fiduciary and Tax Specialist at Sanlam Private Wealth
 
D-day is drawing near for South African taxpayers with undisclosed offshore assets
The new global standard for the Automatic Exchange of Information (AEOI) means that from 2017, SARS will have automatic access to information on assets held by South African taxpayers in most other countries. This means that if your clients have any undisclosed offshore assets or receive an offshore income, it’s crucial that they take corrective action to avoid harsh penalties or possible prosecution.
 Investors have until March 2017 to voluntarily disclose offshore assets and income
In the National Budget earlier this year Finance Minister Pravin Gordhan announced that non-compliant taxpayers will have the opportunity to voluntarily regularise their tax and exchange control affairs with minimal penalty. This can be done by participating in the proposed Special Voluntary Disclosure Programme (SVDP), which will run within a limited window period – it started on 1 October 2016 and will end on 31 March 2017. Applications for the programme may be made on a ‘no-name approach’ basis or in a representative capacity.
Investors who participate may be granted a number of tax and exchange control reliefs
The exact details of the reliefs are still under debate as part of the draft bill. The table below, however, provides a general overview of the tax and exchange control relief measures that will be granted to successful applicants:

Encourage clients who may be affected to consult a tax professional
Investors who are found to be non-compliant following the SVDP will face the full force of the law, so it’s important to make your clients aware of the opportunity to do the right thing while they have the chance. If you don’t have specialist tax expertise within your practice, encourage your clients to get guidance from tax professionals. It’s also important to be aware that there are certain restrictions to who may apply for the SVDP. For example, clients who are aware of any pending or current audits or investigations against them relating to foreign assets or foreign taxes specifically, cannot participate in the SVDP. A tax professional will also be able to determine if any restrictions apply to your clients if they’re not sure.