Secondary

sars-high-flyers

SARS closing loopholes for high-net-worth individuals

“The days of wealthy taxpayers’ tax compliance status not being fully tested by SARS are well and truly over,” Peter Dachs, head of ENSafrica’s tax department writes in Business Day.

According to SARS commissioner Edward Kieswetter, improved tax collection and administration “continues to be an important element in achieving fiscal consolidation as SARS continues to rebuild its capacity. As an organisation, our near-term objectives include … finalising the tax gap study … to quantify the difference between how much tax should be collected and how much is collected.”

When the SARS Large Business Centre was re-established in 2018, one of its objectives was to focus on wealthy individuals as a “target segment”. To SARS, these are individuals whose gross income exceeds R7m a year and/or whose gross wealth exceeds R75m. One of the historic difficulties for SARS has been to identify high-net-worth individuals and ascertain all the relevant details of their assets and structures. However, in recent years the tax disclosure landscape has been radically altered.

Some of the game-changers:

  • The Organisation for Economic Co-operation and Development initiative that introduced a standardised model for the automatic exchange of information, to allow participating jurisdictions to share information about their tax residents.
  • In terms of the Tax Administration Act of 2011, SARS may request or provide information to foreign governments under double tax agreements or other multilateral or bilateral information exchange agreements.
  • SARS receives information on SA taxpayers from 87 jurisdictions in terms of the automatic exchange.
  • The individual tax return now also requires information from taxpayers regarding their foreign investments and structures, such as offshore trusts.

“Provided there has been compliance with all the relevant and complex tax rules regarding offshore trusts, no adverse tax consequences should arise. However, if there has been any level of non-compliance, the relevant taxpayer should expect a questionnaire from SARS followed by an audit process ultimately resulting in an additional assessment that could include interest and potentially significant penalties,” according to Dachs.

Click here to read the original article.

, ,

Comments are closed.
SA Corona Virus Online Portal Logo
CLICK HERE FOR MORE INFORMATION