Article by: Garsfonteing Accountant: Nardus Venter
How to Avoid Tax Penalties and Prosecution with SARS Voluntary Disclosure Programmes
Are you worried about the consequences of not filing or paying your taxes correctly? Learn how you can come clean with the SARS and benefit from their Voluntary Disclosure Programmes in this post.
Why You Should File and Pay Your Taxes on Time
Very few business owners we’ve ever met consider the SARS a friend. In fact, given the option, the majority would happily overpay their taxes if it meant that they never heard from the Tax man.
However, ignoring or avoiding your tax obligations is not a wise strategy. Not only are you breaking the law, but you are also risking severe penalties and prosecution from the SARS. These could include:
Therefore, it is in your best interest to file and pay your taxes on time and accurately. This will help you avoid unnecessary trouble and stress, and also demonstrate your compliance and integrity as a business owner.
What to Do If You Have Non-Submissions or Inaccurate Submissions
If you have already made some mistakes or omissions in your tax affairs, don't panic. There is still a way to rectify your situation and reduce your liability.
Traditionally, those fearing prosecution would submit amended returns showing their full exposure to the SARS and then fall on their mercy or the mercy of the courts to avoid very stiff penalties and or prosecution.
Fortunately, in recent years the SARS has proven itself a friend to business by initially introducing a Voluntary Disclosure Programme and now more recently a Special Voluntary Disclosure Programme.
What are the SARS Voluntary Disclosure Programmes?
The SARS Voluntary Disclosure Programmes are initiatives that allow taxpayers to voluntarily disclose any tax defaults or irregularities that they have committed in the past, and in return, receive relief from penalties and prosecution.
There are two types of Voluntary Disclosure Programmes:
Both programmes offer the following benefits to eligible taxpayers:
What’s the difference between the two:
| Programme |
VDP |
SVDP |
|---|---|---|
| Target Audience |
South African taxpayers with tax defaults in respect of any tax types administered under the Tax Administration Act, disclosures may include defaults on foreign taxable income. |
South African taxpayers with offshore assets and income |
| Period available |
Ongoing |
1 October 2016 - 31 August 201 |
| Application |
VDP01 form via eFiling |
SVDP section of the VDPO1 form via eFiling for tax defaults and the SVDP01 form for exchange control defaults |
How to Apply for the SARS Voluntary Disclosure Programmes
If you think you qualify for either of the SARS Voluntary Disclosure Programmes, you can apply online through the SARS eFiling system. You will need to fill out an application form and provide supporting documents, such as:
Alternatively, you can also apply through a registered tax practitioner, who can help you with the process and advise you on the best course of action. If you need professional assistance, you can contact us and we will be happy to help you.
Our experience has shown that just like snowflakes, each taxpayer's circumstance is unique, therefore, do not attempt your application as a DIY project, rather consult a professional.
At SME.TAX we do more than just assist clients with tax planning; we are your “one-stop SME shop”, assisting with everything from Accounting, Business Management, BEE, Consulting, Company Registration to Payroll and Mentoring
For more information, please visit our website www.sme.tax or give us a call on 012 021 0829
