We recently discussed the Special VDP which lets non-compliant taxpayers voluntarily disclose offshore assets and income in order to regularise both their tax and exchange control affairs. As promised, here is an update for you on current changes to the SVDP. Please note that the final amendment Bill has not at date of writing been passed by Parliament, so it is possible there will be some further changes. We’ll keep you advised.
The main changes
- The closing date has been extended. Originally it was from 1 October 2016 to 31 March 2017. The closing date is now 30 June 2017.
- The original intention was that seed capital and investment profits and/or losses would be separately worked out. Now there will be one combined calculation.
- The amount will be determined as 50% of the highest value of all undeclared assets between 1 March 2010 and 28 February 2015 (i.e. a valuation must be done for each of the 5 years). It is to be converted into local currency at the closing foreign exchange rate on 28 February of the relevant year when the highest value was achieved.
- The “undeclared income that originally gave rise to the assets” above will be exempt from income tax, estate duty and donations tax. Future income on these assets will be taxed.
- Other taxes – VAT, PAYE, UIF and SDL are not included in the special VDP and taxpayers will remain liable for any such taxes which will have to be dealt with under the normal VDP process.
- Taxpayers who disposed of offshore assets before 1 March 2010 may apply for special VDP relief.
As you can see this is a complicated matter and it is disappointing that the Special VDP has opened without the enabling legislation in place. If you think any of this may apply to you, seek expert advice on this highly sensitive topic.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)