For many companies, this time of year is financial year-end.
So you'll likely be going through all your financial records to make sure everything is in order. But imagine the horror of realising your accountant submitted incorrect information in your most recent tax return?
It happens increasingly often.
And if SARS suspects there's something fishy with your books, it could do a surprise raid on your business to conduct search and seizures if it suspects tax evasion, says FSP Business
So whether intentional or not, your business faces huge penalties and, as the business owner, you could face jail time for this.
Luckily, SARS has extended its voluntary disclosure programme (VDP)
in an attempt to 'encourage taxpayers to come forward on a voluntary basis to regularise their tax affairs with SARS and avoid the imposition of understatement penalties and other administrative penalties,' says SARS.
If you aren't already facing a tax audit or investigation into your tax affairs, you can apply for it!
The VDP applies to all taxes administered by SARS, excluding Customs and Excise tax.
When can you apply for SARS' VDP?
SARS will consider your application for the VDP if your business failed to submit information to SARS, submitted inaccurate or incomplete information to SARS, or adopted a tax position which resulted in an incorrect assessment being issued.
How can you apply for the VDP?
VDP applications can only be submitted electronically via the SARS eFiling system.
Once you've applied, you'll need to enter into a written agreement with SARS stating all relevant information such as the facts of your default, the amount payable to SARS, and the arrangements and dates for repayment.
If SARS does grant you VDP relief, you can rest assured that SARS will not pursue criminal prosecution for tax offences arising out of the default.
But you'll still be liable for interest and understatement penalties of up to 10%.
Luckily, if SARS finds there was no gross negligence or intentional tax evasion on your part, your penalty will be levied at 0%!
So apply for SARS' VDP if you realise you've submitted incorrect information to SARS in previous tax returns.
It's worth it for the peace of mind that you won't be arrested for tax evasion.
If you need more information on VDP, get your hands on the Practical Vat Loose Leaf. In the Practical Vat Loose Leaf we've got a dedicated chapter on VDP. In it you'll discover:
What taxes are covered under VDP?
7 requirements you must meet to qualify for the VDP
What relief are you entitled to?
Checklist: 3 taxes/penalties you'll be exempt from
How far back will SARS go?
How do you apply?
Step #1: Get a copy of the VDP01 form
Step #2: Submit the application form
Step #3: Wait for feedback from SARS
Use Excon VDP as your last lifeline
Subscribe to the Practical Vat Loose Leaf here...