Visit the national COVID-19 Online Resource and News Portal at www.sacoronavirus.co.za or see SARS COVID-19 news items and tax relief measures here.

Home » Media » Media Releases » 

SARS increases its focus on wealthy individuals and offshore holdings

SARS increases its focus on wealthy individuals and offshore holdings

Tshwane, 24 February 2021 – The South African Revenue Service (SARS) is committed to its strategic intent to develop and administer a tax and customs system based on voluntary compliance. We believe that most taxpayers want to fulfil their legal obligations voluntarily. In this regard, SARS provides clarity and certainty to taxpayers to fulfil these obligations, and works diligently to make it easy and seamless to transact with the organisation. Equally important for SARS is to make it hard and costly for those taxpayers who do not comply.

For SARS to continue to provide a customized and seamless service to various categories of taxpayers, we are establishing a separate unit to focus on Individual Taxpayers with wealth and complex financial arrangements. The unit, which will be known as High Wealth Individual Taxpayer Segment (HWI) will initially be co-located with the Large Business & International Taxpayer Segment (LB&I).

This unit will focus on individual taxpayers with wealth and complex financial arrangements. We will be offering a differentiated service, as we do with other tax types, to the individuals with significant wealth, often derived from multiple sources other than a salary and who employ complex, and often offshore, financial arrangements. We believe that statements of assets and liabilities often say more about their financial affairs than statements of income.
SARS is on a journey to foster a culture of voluntary compliance. Consequently, we have been paying particular attention to taxpayers with undeclared offshore holdings to optimise compliance. As an early adopter of the international standard for the Automatic Exchange of Financial Account Information, SARS has at its disposal information relating to offshore account holdings of South African taxpayers, some which seems not to have been declared. The information that has come into our possession shows possible non-compliance by a number of these taxpayers.

In 2016/17, taxpayers were given the opportunity to regularise their tax affairs to account for their offshore holdings through the Special Voluntary Disclosure Programme (SVDP). Taxpayers also had the opportunity to do so through the ongoing Voluntary Disclosure Programme (VDP) under the Tax Administration Act, 2011. Some taxpayers took advantage of this. However, despite the window of opportunity to regularise their tax affairs, some taxpayers chose not to do so. The information that SARS has received comes from 87 jurisdictions across the world, detailing the offshore financial holdings of South African taxpayers. We intend to undertake a careful review of the information and audit it, where necessary.

In the interests of fair and efficient administration of the system, SARS will be writing to affected taxpayers to request information about their offshore holdings. The request is for relevant material for risk assessment purposes that does not signal the commencement of an audit process but may inform future action.

Taxpayers who want to regularise their tax affairs are still able to do so through the ongoing VDP, which offers more favourable terms for an assessment (in terms of penalty amount). SARS therefore encourages taxpayers with undisclosed assets to take advantage of the VDP process. Taxpayers are reminded that failure to do so may result in administrative or even criminal action being taken against them.

A dedicated email address, [email protected] has been set up to manage responses from affected taxpayers and adopt a consistent approach. Affected taxpayers who wish to make use of the ongoing VDP and taxpayers who have not yet been contacted are advised to contact the VDP Unit directly at [email protected].
ENDS

 

To access this page in different languages click on the links below:

Share this page on:
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email
Share on print
Print