Do you know if SARS will grant you relief?
Did you make a mistake with your taxes and want to come clean?
Then you'll be glad to know there's a Voluntary Disclosure Programme (VDP) in place to encourage you to come forward and disclose your tax errors so you can avoid penalties and prosecution.
But SARS doesn't just grant VDP relief. It uses very strict criteria when it decides on your application.
It's important you know about its criteria so you can weigh up your chances of success and avoid penalties.
And that's where we come in.
Keep reading as we tell you when SARS will and won't grant you VDP relief.
Before we get to when SARS will and won't grant you VDP relief, let's look at the requirements you must meet to qualify
The requirements are that:
Your disclosure must be voluntary;
It must be a new disclosure. (You mustn't have already disclosed it to SARS);
You must disclose all relevant information about your situation;
The VDP can't result in a refund from SARS;
You must use the VDP01 form to make your application; and
You must apply for VDP via eFiling.
The great thing about a VDP
is, if you fix your non-compliance, SARS will grant 100% relief for an administrative non-compliance penalty. (The relief excludes penalties for late submission of returns or for the late payment of tax.) SARS also won't pursue criminal prosecution if you apply for a VDP.
Now that we're clear on the requirements, let's get to when SARS will and won't grant you VDP relief…
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SARS will give you relief in these seven instances
According to the Practical Tax Loose Leaf Service,
SARS will grant you relief in the following cases (otherwise referred to as 'defaults') if the case results in the incorrect amount being assessed and you pay it, or an incorrect amount being refunded to you by SARS:
When you submit inaccurate or incomplete information to SARS;
The adoption of a tax position;
Any statutory offence arising from the default or a related common law offence;
100% relief for an administrative non-compliance penalty, or a penalty you receive under a Tax Act;
SARS didn't assess you for the correct amount of tax;
You didn't pay the correct amount of tax; or
SARS made an incorrect refund.
And now for the bad news…
In these six instances, SARS won't grant you VDP relief
SARS won't grant you relief if:
Your disclosure on the VDP isn't complete;
You don't make SARS aware of your mistake;
You submit a return late;
The VDP will result in a SARS refund;
There's already an audit or investigation for the default to which the VDP application applies; and
You pay your tax late.
A VDP is a great tool to get your tax affairs in order. Use it to your advantage and weigh up your chances of success now that you know when SARS will and won't grant you VDP relief.
PS: To find out more information about the VDP, for example, how to apply for it and what happens after you do, check out the Practical Tax Loose Leaf Service.