As announced in the recent budget, a further special “Voluntary Disclosure Programme” will begin on 1 October this year. The following is a brief overview:
Exchange Control Contraventions
SA residents (individuals and entities) will be allowed to disclose and regularise their exchange control contraventions that occurred prior to 29 February 2016.
Levy
A levy based on the asset’s market value as at February 29 2016 will have to be paid. Note that this must be paid from foreign-sourced funds and the normal forex allowances may not be used for this purpose. The following conditions apply:
- If the regularised assets are brought back to SA, 5% of the leviable amount must be paid
- If the regularised assets are kept offshore, 10% of the leviable amount must be paid.
- Where insufficient liquid foreign assets are available, an additional 2% will be added, to the extent that local assets are used to settle the levy.
Funds not previously taxed and used for funding the acquisition of offshore assets
50% of the total amount not previously taxed originally transferred offshore before March 2015 will be included in the taxpayer’s income.
Investment return on offshore assets
100% of the total amount between 1 March 2010 to the date of disclosure will be included in the taxpayer’s taxable income. Investment returns prior to 1 March 2010 are effectively exempt from tax.
Understatement penalties
No understatement penalties will be levied.
Criminal prosecution
No criminal prosecution will be pursued.