South Africa is one of the signatories who implements the Common Reporting Standards (CRS), in terms of which tax and financial information is exchanged on a global level in order to minimize worldwide tax evasion. As of 1 September 2017, South Africa has commenced with the exchange of data with other signatories of the CRS to ensure transparency and more efficient tax administration.
Financial institutions will give personal account information to SARS on an annual basis which will expose any offshore transactions as well as offshore investment structures.
In that regard, our experience is that many taxpayers are at risk for failing to disclose the following:
- Rental income earned from lease of foreign property;
- Capital gains on disposal of property;
- Interest and dividends earned from foreign investment;
- Offshore trust distributions to South African beneficiaries; and
- Income for employment services performed abroad.