A special voluntary disclosure programme (VDP) was proposed in the 2016 Budget to make it easier for non-compliant individuals and firms to disclose assets held and income earned offshore. As was noted in the 2016 Budget Review; “With a new OECD global standard for the automatic exchange of financial information between tax authorities coming into effect from 2017, time is running out for taxpayers who still have undisclosed assets abroad.”
In terms of this proposal, if adopted by Parliament and enacted, both the South African Reserve Bank and the South African Revenue Service will relax the existing VDP rules from 1 October 2016 to 31 March 2017.
The Minister would like to encourage those that may be affected to use the VDP opportunity and ensure their tax and exchange control affairs are in order. Depending on the nature of the contravention of the laws, action against those who have flouted the rules includes the imposition of taxes, understatement and other penalties, forfeiture of funds and criminal prosecution.
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