Tax Planning

Tax is closely related to investments and personal finance, and therefore it made sense to add a tax- advisory service to the service offering of Brenthurst Wealth Management.

In addition to tax advice on investments and any other personal tax matters, Brenthurst also offers clients an e-filing service of provisional tax returns and payments.

Other tax services offered include:

• Income tax registrations
• Company tax registrations
• Completion and submission of income tax returns
• Tax calculations
• Advice on tax planning and salary structuring
• Tax extensions
• Tax directives
• Disputes with SARS

2011 TAX FILING SEASON DEADLINES: 

Employers are currently  submitting all tax certificates and reconciliations to SARS, with the closing date being the 03 June 2011. After this date  individuals will be able to start submitting their annual income tax returns.

DEADLINES FOR SUBMITTING TAX RETURNS: 2011 TAX FILING SEASON.

1 July 2011: Submission period opens for all taxpayers
30 September 2011: Manual submission deadline for all taxpayers
25 November 2011:Electronic submission deadline for non-provisional taxpayers

Kindly note that all Brenthurst Wealth Tax Clients are welcome to start forwarding their income tax documentation to Gavin Butchart or alternatively contact him on (011) 799 8100 or email gavinb@brenthurstwealth.co.za to discuss any tax related issues.

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TIME TO DISCLOSE UNPAID TAX OR EXCHANGE CONTROL CONTRAVENTIONS

November 13 2010

The Voluntary Disclosure Programme (VDP) for people who have contravened the exchange control regulations or who have failed to declare their taxable income opened this week and will run until October 31 next year.

The programme is not an amnesty like the one in 2001, because you will still have to pay any tax you owe, but you will not be prosecuted for the acts or omissions you disclose, and no interest or additional taxes will be levied on the outstanding tax.

South African residents who have failed to declare income for tax purposes may, in addition to the tax, have to pay administrative penalties for the late submission of returns and the late payment of tax.

The penalties start at R250 for taxable income up to R250 000 and can be imposed for each month for which the income or return remains outstanding from January this year, to a maximum of 35 months. Taxpayers can ask for a remittance of these penalties.

According to a statement from the South African Revenue Service (SARS) and the South African Reserve Bank (SARB), tax defaulters will be able to make an initial “no-name” disclosure in order to obtain a non-binding opinion from SARS as to whether or not they will qualify for relief and the extent of any relief.

The SARB’s Financial Surveillance Division will administer the exchange control VDP.

To obtain exchange control relief, you must disclose the nature of your contravention and prove the value of the assets you left overseas when you immigrated to South Africa or when you returned home after working overseas while it was still necessary to declare money earned overseas to the Reserve Bank.

Full relief is also available to you if you inherited offshore funds or assets without your declaring them while it was still necessary to do so, or if you raised a loan overseas without the Reserve Bank’s permission (see “Who should use the VDP?”).

Your tax or exchange control default must have occurred before February 17 this year, when the VDP was announced in the Budget.

If you have contravened only the exchange controls, you need to apply to the SARB’s Financial Surveillance Division. If you have contravened only the tax laws, you need to apply to SARS. If you have contravened the exchange controls and failed to pay tax, you will have to apply to both SARS and the Financial Surveillance Division.

The statement from SARS and the SARB says accountable institutions that assist you to regularise your affairs will, in terms of the Financial Intelligence Centre Act, have to establish and verify your identity and keep records of it. But they will not be obliged to report suspicious or unusual transactions if they have assisted you to regularise your affairs through the VDP for income or assets from legitimate sources.

If you are already being investigated by SARS or the Financial Surveillance Division, you will qualify for relief only under specific circumstances.

WHO SHOULD USE THE VDP?

Offshore assets

You should make use of the VDP to declare illegal offshore assets to an authorised exchange control dealer if you have not yet put your affairs in order and you:

• Immigrated to South Africa without declaring the assets that you left overseas;
• Earned money while working abroad and left the money offshore when you returned to South Africa before July 1, 1997;
• Inherited assets overseas before March 17, 1998 and did not declare them to the Reserve Bank;
• Exported money from South Africa in contravention of the exchange controls; and/or
• Failed to repatriate unspent travel allowances.

Tax

You should make use of the VDP to sort out your tax affairs if you have failed to:

• Declare any income earned from any source in the world or if you have under-reported income to SARS; or
• Declare any capital gains to SARS.

WHAT YOU MUST DO TO QUALIFY FOR THE VDP

Tax

• You must make complete disclosure on the prescribed form before October 31 next year;
• The South African Revenue Service (SARS) must not have been aware of your default;
• The default must have occurred before February 17 this year;
• The default must be one that, if SARS had discovered it, you would have been liable for a penalty or additional tax; and
• Your disclosure must not result in a refund to be paid by SARS.

Exchange control

You must:

• Make complete disclosure on the prescribed form before October 31 next year;
• Have contravened the exchange control regulations before February 28 this year;
• Describe all foreign assets and/or structures (of whatever nature, excluding bearer instruments) in which you have or had any direct or indirect interest; and
• Provide full details of the description and location of the assets, the market value of the assets and proof of valuation.

CONTACTS

For tax disclosure application forms, telephone the South African Revenue Service (SARS) on 0800 00 7277, visit any SARS branch or email vdp@sars.gov.za Applications can also be submitted via eFiling. For more information about the tax Voluntary Disclosure Programme (VDP), visit www.sars.gov.za

Exchange control disclosure application forms can be downloaded from the website of the South African Reserve Bank, www.reservebank.co.za For any exchange control VDP-related queries, contact the Financial Surveillance Division on 012 313 3169 or email SARB-VDPFNS@resbank.co.za

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