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South Africa's Tax Amnesty 'Began' On October 1

by Lorys Charalambous,, Cyprus

04 October 2016

On October 1, 2016, South Africa's Finance Minister launch the special voluntary disclosure program (SVDP), although it has yet to receive parliamentary approval.

The SVDP was announced in the 2016 Budget Speech, and offers non-compliant taxpayers an amnesty on offshore assets and income until March 31, 2017.

It is intended to encourage taxpayers to come forward on a voluntary basis to regularize their tax affairs with the South African Revenue Service (SARS) and avoid the imposition of understatement and administrative penalties. Relief is available in respect of all taxes administered by SARS.

Applications for tax relief may be made to SARS in the new SVDP section of the Voluntary Disclosure Program (VDP01) form that has been available on SARS eFiling since October 1.

The SVDP includes the calculation of one amount to be included in taxable income and subject to tax in South Africa. According to the latest proposal after the consultative process, that inclusion amount will be equal to 40 percent (reduced from 50 percent) of the highest value of the aggregate of all assets held by a taxpayer outside South Africa.

Applications will be processed on the basis of the SVDP framework that is approved by Parliament. However, the final legislation providing for the disclosure tax relief has still to be introduced in Parliament, and the National Treasury and SARS will provide further information on the program's rules in due course.

TAGS: South Africa | compliance | tax | tax compliance | law | ministry of finance | tax authority | offshore | legislation | Africa

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