SARS Voluntary Disclosure Programme

Regularise your tax affairs before SARS comes to you.

If you have undeclared income, offshore assets, crypto gains or other tax defaults, the Voluntary Disclosure Programme (VDP) under the Tax Administration Act lets you come forward and correct the position on more favourable terms than if SARS finds the default first.

Relief available under the VDP

  • No criminal prosecution for a tax offence relating to the disclosed default.
  • Relief from understatement penalties, in whole or in part, which can otherwise be very substantial.
  • Relief from certain administrative non-compliance penalties, other than penalties for late submission of returns or late payment of tax.
  • Certainty: a binding VDP agreement with SARS that closes the matter for the disclosed periods.

What the VDP does not do

The VDP does not reduce the tax itself, and interest is generally still payable. It is about avoiding penalties and prosecution, not paying less tax.

Timing is everything

An application is generally not voluntary if SARS has already notified you of an audit or criminal investigation relating to the default. Once SARS is on your trail, the opportunity may be lost.

Common situations

We assist taxpayers with:

  • Undeclared offshore bank accounts, investments or property.
  • Crypto asset trading or gains that were not declared.
  • Undeclared rental, business or side income.
  • Incorrect VAT or PAYE submissions by a business.
  • Inherited offshore assets that were never disclosed.
  • Estates and trusts with historical tax defaults.

The VDP process

From first assessment to agreement.

  1. Confidential assessment
    We review the facts under legal privilege and confirm whether you qualify for the VDP.
  2. Quantify the default
    Working with your accountant, we calculate the tax, interest and periods affected.
  3. Application
    A full and complete disclosure is made to SARS in the prescribed form. Partial disclosure can disqualify the application.
  4. Engagement with SARS
    SARS reviews the application and may ask for further information. We manage this engagement for you.
  5. VDP agreement
    Once approved, a written VDP agreement is concluded and SARS issues the assessments. Payment arrangements can sometimes be negotiated.

Exchange control contraventions, for example unauthorised offshore assets, are dealt with separately by the Financial Surveillance Department of the South African Reserve Bank. We advise on both tax and exchange control aspects together.

GET IN TOUCH

What to prepare

Helpful information for a first meeting.

  • A summary of the undeclared income or assets and when they arose.
  • Bank, investment or exchange statements for the relevant periods.
  • Your tax returns for the affected years.
  • Any correspondence received from SARS.
  • Details of any offshore structures or trusts involved.

Common Questions

Individuals, companies, trusts and other taxpayers, provided the disclosure is voluntary, involves a default that would otherwise lead to an understatement penalty, is full and complete, and does not result in a refund.
Generally not for the same matter if SARS has notified you of an audit or investigation into it, although SARS has some discretion where the default would not otherwise have been detected.
Generally no. The VDP gives relief from penalties and prosecution, but the tax and interest are still payable.
Discussions with your attorney are protected by legal privilege. Once an application is made, SARS deals with it under the tax confidentiality provisions of the Tax Administration Act.
SARS can raise assessments going back further than the usual three-year period where there was fraud, misrepresentation or non-disclosure, impose understatement penalties of up to 200% of the tax, and in serious cases refer the matter for criminal prosecution.

NEED TO GET RIGHT WITH SARS?

We help taxpayers regularise their affairs discreetly, before SARS takes action.

Read more: SARS disputes · Directors’ personal liability for company tax debts

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This page is general information and not legal advice.

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