What is the SVDP?
The Special Voluntary Disclosure Programme (SVDP) was for taxpayers who want to disclose their offshore assets and income. In line with the new automatic exchange of information between tax authorities, SARS started receiving offshore third party financial data from other tax authorities in 2017. Taxpayers who have undisclosed assets abroad had a limited window period which started on 1 October 2016 and closed on 31 August 2017 to disclose their foreign assets and apply for relief. Applications window period now closed.
What is the difference between VDP and SVDP?
The main differences between the Voluntary Disclosure Programme (VDP) and the SVDP are:
Programme | VDP | SVDP |
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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 2017 – closed for applications. |
Application | VDP01 form via eFiling | |
Why should I apply for the SVDP?
There are several benefits to individuals and companies if they apply for the SVDP:
- Relief will be granted under the SVDP:
- Only 40% of the highest value of the total of the aggregate of all assets outside South Africa derived from undeclared income and accumulated between or deemed to be between 1 March 2010 and 28 February 2015 will be included in the taxable income and subject to tax in South Africa.
- The undeclared income that originally gave rise to the assets mentioned above will be exempt from income tax, donations tax and estate duty liabilities arising in the past. However, future income will be fully taxed and assets declared will remain liable for donations tax and estate duty in the future, should the applicant donate these assets or pass away while holding them.
- Interest on tax debts arising from the disclosure will commence only from the 2015 year of assessment.
- Investment income and other taxable events prior to 1 March 2015 will be exempt from tax. (Future investment income will be subject to tax)
- No understatement penalties will be levied where an application under the SVDP is successful.
- Other SARS administrative non-compliance penalty relief – The same as current VDP.
- Where an application under the SVDP is successful SARS will not pursue a criminal prosecution in that particular case.
Top Tip: If you are experiencing any challenges with submitting the VDP and SVDP forms via eFiling, please see our browser compatibility guidelines.
SVDP FAQs
Q: What does SARS want to achieve with the SVDP? |
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A: The SVDP aims to encourage non-compliant taxpayers to come forward on a voluntary basis to disclose their offshore assets and thereby regularising their tax affairs in this regard. |
Q: Who may apply for SVDP? |
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A:
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Q: Who may not apply for SVDP? |
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A:
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Q: Are there any requirements for a valid SVDP application? |
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A: Yes. Refer to requirements under section 227 of the Tax Administration Act.
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Q: Are there any documentary requirements for a valid SVDP application? |
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A: Yes. The following supporting documents must accompany the applications to determine the amount for tax purposes
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Q: What relief is offered if the tax SVDP is successful? |
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A: The undeclared income that originally gave rise to the foreign asset will be exempt from income tax, donations tax and estate duty liabilities arising in the past. Only 40% of the highest value of the aggregate of all assets situated outside South Africa between (or deemed to be between) 1 March 2010 and 28 February 2015 that were derived from undeclared income will be included in taxable income and subject to tax in South Africa in the 2015 tax period. Investment earnings & other taxable events prior to 1 March 2015 will be exempt from tax Interest on tax debts arising from the disclosure only commence from the 2015 year of assessment No understatement penalties will be levied 100% relief of an administrative non-compliance penalty that was/may be imposed excluding a penalty imposed for the late submission of a return. SARS will not pursue criminal charges for the tax offence arising from the disclosure. |
Q: Do I convert the foreign currency amounts to South African rand? How and when.? |
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A: Yes. The value for tax relief purposes is the market value determined in the relevant foreign currency translated to South African Rand at the spot rate at the end of the tax period in which the highest value fell. |
Q: What happens if my application is approved? |
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A: An agreement is concluded between SARS and the applicant that reflects the outcome of the application process. |
Q: What is the window period for SVDP? |
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A: Applications for relief under the SVDP will apply for a limited window period starting on 1 October 2016 and closing on 31 August 2017; Applications submitted prior to 1 October 2016 or after 31 August 2017 will be processed under the normal VDP rules, i.e. the SVDP rules cannot be applied. The window period began on I October 2016 and closed on 31 August 2017. |
Q: Can I object and appeal against a VDP assessment? |
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A: No. The SVDP assessment gives effect to the SVDP agreement, and typically includes the disclosed additional taxable income and, interest and certain non-waivable penalties. An SVDP assessment is not subject to objection and appeal. |
Q: Can I request a remission of interest and/or penalties raised in a SVDP assessment? |
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A: No. The interest and penalties form part of the SVDP agreement as well as the SVDP assessment, both of which are final and binding. |
Q: What must I do if I have made application for SVDP? |
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A: The following are important to note:
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Q: What are the contact details for tax related SVDP applications? |
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A: Telephone number: 0800 864 613 |
Q: What are the contact details for Exchange Control SVDP applications? |
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A: Telephone number: 012 313 3951 |
Quick Link to SARB
SVDP Documents
Although the application form is only available under eFiling, the documents in the block below are of importance to you.
Guide Document Type | Description |
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Guide | Voluntary Disclosure Programme Guide |
Guide | Special Voluntary Disclosure Programme Guide |
Guide | Draft Guide: Special Voluntary Disclosure Programme (v1.2) |
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