In the most recent edition of our Opportunity magazine we explained how authorities from a number of jurisdictions are trying to reduce tax evasion by sharing information using the Common Reporting Standard (CRS). CRS is an information-sharing-and-reporting process that is already underway in a number of countries (including South Africa). In the article we also explained that Pravin Gordhan had announced another 'tax and exchange control amnesty' in the 2016 Budget Speech. In this article we will explain why. If you haven't already done so, you should get tax advice if you have any undisclosed offshore assets or income.
A final chance for non-compliant taxpayers to disclose offshore assets and income
In the 2016 Budget Speech Pravin Gordhan announced that a Special Voluntary Disclosure Programme (SVDP) would give individuals and companies an opportunity to disclose and declare all non-compliant offshore income and assets. This latest special programme extends from an existing voluntary disclosure programme that has offered amnesty from non-compliance penalties and criminal proceedings for those who have disclosed their offshore assets and income since 2012.
Why is it critically important to come clean now if you haven't already done so?
The incentive to do this instead of waiting for any other 'final, final' amnesty is that a new global standard for the automatic exchange of information between authorities
has been introduced. Treasury gave warning in an explanatory statement of the programme that, with new global standards for the automatic exchange of information between tax authorities coming into force, 'time is now running out for taxpayers who still have undisclosed assets abroad'. Under the announcement of this latest 'amnesty' it is clear that if the South African Revenue Service (SARS) receives information from any international exchange of information procedure, you will not be eligible for the special programme.
Participate in the proposed Special Voluntary Disclosure Programme to avoid prosecution
The SVDP will run within a limited window period from 1 October 2016 to 31 March 2017. During this time non-compliant taxpayers can regularise their tax and exchange control matters when it comes to any non-compliant offshore assets and income. Applications for the programme can be made through a no-name approach or in a representative capacity.
The programme will apply to individuals and companies, but not to trusts in general
Parties to foreign discretionary trusts, such as beneficiaries, donors and settlors, may, however, participate in the SVDP. It is best to seek financial advice and/or specialist tax advice if you aren't sure how this programme could apply to you and about the consequences of compliance (and non-compliance) – especially if you are a beneficiary or settlor or related party of a trust structure.
SARS is giving you some relief for participating in the programme
The South African Reserve Bank (SARB) is also offering relief for exchange control contraventions
Get expert advice and ensure that your affairs are in order
The final details of the specific relief are still under debate. We will provide you with an update on the final legislation. Nedbank Private Wealth is here to provide you with the specialist services and support to make the most of your wealth and comply with all regulatory requirements, no matter where in the world it is!
Please contact your relationship manager to schedule an appointment with a fiduciary specialist, who will assist you with a review of your existing estate plan or create one from scratch.
DISCLAIMER The Fiduciary Focus Newsletter is intended for general information purposes only and should not be construed as tax, legal or accounting advice. This communication is based on our bona fide interpretation of legislation, rules, regulations and publications. Nedbank Private Wealth provides estate and tax planning advice; however, we do not provide tax, legal or accounting advice and you are requested to consult a professional tax advisor or professional in this regard.
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