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Invested offshore to dodge the taxman? Sars is coming for you

6 January 2021 7:47 PM
Tags:
SARS
The Money Show
South African Revenue Service
offshore investing
taxation
offshore holdings
Jean du Toit
Automatic Exchange of Information

'With the notice we've seen, Sars asks for information regarding tax years from 2015 to 2019' - tax attorney Jean du Toit.

One route to avoid taxation has traditionally been to take your money offshore, without disclosure.

Now the South African Revenue Service has offshore investors on its radar.

Sars is finally ready to utilise the Automatic Exchange of Information to investigate South African tax residents' offshore holdings, says tax attorney Jean du Toit.

Some taxpayers have already received notices to this effect.

If you are a South African tax resident you are subject to taxation on your worldwide income and you are required to disclose that to Sars.

Jean du Toit, Tax attorney - Tax Consulting South Africa

Du Toit explains the system in conversation with Ray White on The Money Show.

It refers to what is called the Common Reporting Standard (CRS) which was developed by the Organisation for Economic Co-operation and Development (OECD) back in 2014.

Jean du Toit, Tax attorney - Tax Consulting South Africa

It requires financial institutions of participating jurisdictions to report account information of non-residents to their tax authority, which then shares this information with the corresponding authority where the individual is resident [in this case, Sars].

Jean du Toit, Tax attorney - Tax Consulting South Africa

[This notice] says Sars has obtained information through this process from 87 different jurisdictions regarding South African taxpayers.

Jean du Toit, Tax attorney - Tax Consulting South Africa

If this tool has been available since 2014, why has Sars chosen to make use of it only now?

It could be that the revenue service has been building up capacity to utilise the Automatic Exchange of Information, says du Toit.

Another possibility is that Sars is being forced to look at untapped pools of revenue because of budget constraints.

With the notice that we've seen, Sars asks for information regarding tax years from 2015 to 2019.

Jean du Toit, Tax attorney - Tax Consulting South Africa

The recipient of this notice needs to give details of their offshore holdings - as it is referred to - for effectively, the past five years.

Jean du Toit, Tax attorney - Tax Consulting South Africa

We've seen very positive things from Sars over the last year or so and the new commissioner is very much emphasizing a no-tolerance policy with any noncompliance across the board.

Jean du Toit, Tax attorney - Tax Consulting South Africa

For more detail, listen to the audio clip below:


This article first appeared on 702 : Invested offshore to dodge the taxman? Sars is coming for you




6 January 2021 7:47 PM
Tags:
SARS
The Money Show
South African Revenue Service
offshore investing
taxation
offshore holdings
Jean du Toit
Automatic Exchange of Information

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