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What are SARS' obligations once the VDP process is complete?

by , 14 January 2014
Let's say you've discovered you qualify for a Voluntary Disclosure Programme (VDP). So you decide to get your tax affairs in order. You apply to SARS for VDP and submit all the relevant forms. The VDP process is now complete. What now? What is SARS' obligation?

Do you know what happens once the VDP process is complete?

The simple answer is:

SARS has the following obligations once the VDP process is complete

The Practical Vat Loose Leaf Service explains that after you've applied for VDP, and the VDP processes have been concluded, SARS must:

  • Not pursue criminal prosecution arising from the 'default' or a related common law offence;
  • Grant certain relief for any understatement penalty;
  • Grant 100% relief for an administrative non-compliance penalty. This excludes a penalty imposed for the late submission of a return or late payment of tax.

In addition, you and SARS must enter into a written agreement. It must include details on:

  • The facts of the 'default' on which the voluntary disclosure relief is based.
  • The amount you have to pay. This amount must separately reflect the understatement penalty payable.
  • The arrangements and dates for payment.
  • Relevant undertakings by the parties (you and SARS).

Remember that you must get an assessment to confirm the agreement.

'SARS must issue an assessment or determination to give effect to the agreement entered into between it and the vendor. This assessment isn't subject to objection and appeal.' says the Practical Vat Loose Leaf Service.

Well there you have it. Once the VDP process is over, SARS must fulfill ALL the above mentioned obligations. But be warned: SARS can withdraw the voluntary disclosure relief if it believes you've failed to disclose information relevant to your application for voluntary disclosure relief.

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