The Voluntary Disclosure Program (VDP) allows taxpayers to correct VAT errors by voluntarily reporting them, which can help reduce penalties from SARS or prevent legal action if SARS discovers the mistake independently. Applicants must meet several criteria, and if approved, SARS will issue a written agreement detailing the relief granted and any outstanding liabilities. The VDP agreement is legally binding, and any breach may result in its revocation.
Resolving VAT discrepancies: Leveraging South Africa’s Voluntary Disclosure Program
Public
Other countries
Author: Ivana Picajkić
Category:
Fiscal subject related
General information
Views:
38
Content accuracy validation date:
21.11.2024
Content accuracy validation time:
08:08h
The Voluntary Disclosure Program (VDP) provides a way to correct errors in VAT obligations. By voluntarily reporting your error you can potentially lower penalties imposed by SARS or avoid further legal action if they find the mistake on their own.
To apply for the Voluntary Disclosure Program (VDP), a "default" must have occurred. As defined in Section 225 of the Tax Administration Act 28 of 2011 (TAA), a "default" refers to submitting incorrect or incomplete information to SARS, failing to provide the required information, or adopting a tax position that leads to an understatement.
In order to qualify for a VDP application, the following requirements must be met:
- The disclosure must be made freely.
- It must involve a default that has not occurred within 5 years of the disclosure of a similar default.
- It must be full and complete in all material respects.
- It must involve a behavior referred to in the understatement penalty table in Section 223 of the TAA.
- It should not result in a refund due by SARS (if that’s the case it should be rectified using the standard provisions and procedures outlined in the TAA).
- It must be made in the prescribed form and manner.
If SARS approves your VDP application, they will create a written agreement with you. This agreement details the relief provided and any outstanding liabilities to SARS.
It's important to note that a VDP application usually offers relief from:
- Criminal prosecution for tax offenses related to the default,
- Reduced understatement penalties as specified in columns 5 or 6 of the penalty table,
- A complete waiver (100%) of administrative non-compliance penalties, whether already imposed or potentially applicable under Chapter 15 or any tax Act.
However, this relief generally does not cover penalties for late payments or late submission of returns. The VDP agreement is legally binding, and any violation could lead to SARS revoking the agreement.
Other news from Other countries
Philippines Implements 12% VAT on Non-Resident Digital Service Providers Starting June 2025
Public
Other countries
Author: Ivana Picajkić
Other countries
Author: Ivana Picajkić
In October 2024, the President signed Senate Bill 2528, which introduces a 12% value-added tax (VAT) on non-resident digital service providers (DSPs) in the Philippines, effective by June 2025. The Bureau of Internal Revenue (BIR) stated that non-resident DSPs will not need local tax representatives for VAT compliance but can appoint a local third-party service provider for administrative tasks. T... Read more
Reminder: South Africa released draft bill with proposed changes across various tax laws
Public
Other countries
Author: Ivana Picajkić
Other countries
Author: Ivana Picajkić
The South African National Treasury released the draft Taxation Laws Amendment Bill (B16-2024) on October 30, 2024, proposing significant changes to various tax laws. Following the release, a public comment period will allow stakeholders to provide feedback on the proposed amendments. The National Treasury will consider these comments and may revise the draft before it is formally introduced in Pa... Read more
Reminder: Adoption of Peppol International (PINT) in New Zealand
Public
Other countries
Author: Ivana Picajkić
Other countries
Author: Ivana Picajkić
New Zealand is rolling out the PINT A-NZ specification for e-invoicing, which replaced the ANZ Peppol BIS 3.0 specification from September 15, 2024. This new format will be mandatory for business-to-government (B2G) transactions starting May 15, 2025; until then, the standard Peppol BIS 3.0 invoice format remains optional. New Zealand has begun the phased rollout of the PINT A-NZ specification for... Read more
Correction of the tax base and other changes in Czech Republic in the area of VAT from 2025
Public
Author: Ivana Picajkić
Starting in 2025, several significant changes to Value Added Tax (VAT) regulations will be implemented, including extended deadlines for tax base corrections, new VAT registration limits, simplified procedures for bad debts, and adjustments related to real estate transactions. The changes are as following: Corrections to the Tax Base: The period for correcting the tax base will extend from 3 ye... Read more
Air travel receipts in China going digital as of December
Public
Other countries
Author: Ivana Picajkić
Other countries
Author: Ivana Picajkić
Starting December 1, 2024, China will implement digital travel receipts for air passengers through the new “Electronic Flight Receipt” (EFR) system, as announced by the Civil Aviation Administration. This system will replace traditional paper itineraries, allowing travellers to access electronic receipts for up to 180 days after their flights via airline websites or mobile apps. Businesses will be... Read more
12% VAT Implementation on January 1 2025 in Indonesia
Public
Other countries
Author: Ivana Picajkić
Other countries
Author: Ivana Picajkić
On November 14, 2024, Indonesia’s Finance Minister announced that the new 12% value-added tax (VAT) will be implemented starting January 1 2025, in accordance with the 2021 taxation law. Despite calls for a delay, the Minister stated that current budget and fiscal conditions do not permit a postponement. She emphasized the need to increase state revenue to support post-pandemic economic recovery a... Read more
New VAT guidelines in Philippines could lead to closure of non-compliant digital service providers
Other countries
Author: Ivana Picajkić
The Bureau of Internal Revenue (BIR) in the Philippines has proposed a regulation to impose a 12% Value Added Tax (VAT) on digital services, in accordance with Republic Act No. 12023. This regulation allows the BIR to issue closure orders against digital service providers (DSPs) that fail to register or comply with the VAT law. The Department of Information and Communications Technology (DICT) and the National Telecommunications Commission (NTC) will enforce these orders. Read more