WHAT IS THE VOLUNTARY DISCLOSURE PROGRAMME (“VDP”)?
The VDP is a process regulated by the Tax Administration Act which encourages applicants to disclose their non-compliance, such as undeclared or understated income, and to give them the opportunity to become fully tax compliant.
WHY IS THERE A VDP?
The purpose of the VDP is to enhance voluntary compliance in the interest of good management of the tax system and the best use of SARS resources.
WHAT DOES SARS WANT TO ACHIEVE WITH THE VDP?
The VDP aims to encourage taxpayers to come forward on a voluntary basis to regularise their tax affairs with SARS and to pay the outstanding tax liability in order to ensure that the tax system is efficiently run.
WHICH TAX TYPES ARE INCLUDED UNDER THE VDP?
The VDP is applicable to all taxes administered by SARS, including income tax, employees’ tax (encompassing PAYE, SDL, UIF), VAT, but excluding Customs and Excise.
WHAT ARE THE REQUIREMENTS FOR A VALID VDP APPLICATION?
The requirements for a valid VDP application are that the disclosure must:
• Be voluntary;
• Involve a default which has not previously been disclosed by the applicant or representative of the applicant;
• Be full and complete in all material aspects;
• Involve the potential imposition of an understatement penalty in respect of the default;
• Not result in a refund due by SARS; and
• Be made in the prescribed form and manner.
WHO MAY APPLY FOR VDP?
Any individual, company or trust who wants to voluntarily disclose their tax non-compliance to SARS, provided they meet the requirements of a valid VDP application.
WHERE DO I FIND AN APPLICATION FORM?
The application form is called the Voluntary Disclosure Application Form (VDP01) and can only be accessed via the SARS e-Filing system.
DO I NEED TO BE REGISTERED FOR E-FILING TO APPLY FOR VDP?
Yes, you first need to register on the e-Filing system before you can apply for VDP.
HOW LONG DOES IT TAKE TO PROCESS A VDP APPLICATION?
SARS is inundated with VDP applications and the current average turnaround time of a VDP application, according to SARS, is 201 working days.
WHAT MUST I DO IF I HAVE MADE AN APPLICATION FOR VDP?
• It is not necessary to request re-confirmation of VDP applications. If the e-Filing system recognised the application, then the application is on the VDP register and will be processed;
• The applicant will be contacted when the application has been allocated to a VDP evaluator for processing. Additional or outstanding supporting documentation can then be submitted to the evaluator;
• No late submission penalties or interest are eligible for VDP relief; these must be paid on assessment.
WHAT SHOULD I DO IF MY APPLICATION IS UNSUCCESSFUL?
Unfortunately, VDP process is not subject to objection and appeal or any other internal remedy. The taxpayer will then have to use normal SARS process in order to disclose the default, this will result in understatement penalties and interest being charged.