Here's how a VDP can save your business 200% in penalties
The Tax Administration Act takes away the discretionary powers of SARS to charge additional tax of up to 200%. Instead, it prescribes understatement penalties applicable to the following:
The penalties for the above vary from case to case, but, if you apply for VDP before SARS notifies you of an audit, then in some cases the penalties are NIL or limited to 10%, says the Practical Vat Loose Leaf Service.
Who qualifies for VDP?
You can apply for a VDP through e-filing if you're not aware of a pending audit or an investigation into your company's affairs or if you're under audit or investigation, where such audit or investigation hasn't been finalised.
If an audit or investigation has already begun, the relief may be limited to any default which SARS may not have detected during the audit.
You're regarded as having knowledge of a pending audit or investigation if you, your representative, a director, shareholder, partner, trustee or agent are aware of such an audit or investigation.
Remember, a senior SARS official must inform you of whether you qualify for voluntary disclosure relief or not.
What are SARS' obligations to you when the VDP process is complete?
After you've applied for VDP and the VDP processes have been concluded, SARS must:
There you have it. Apply for a VDP to ensure you're always on the right side of the law.