FOREIGN BANK ACCOUNTS OR INVESTMENTS

In a recent newsletter of the Sovereign Group (a well respected international financial and trust advisory group), the Chairman, Howard Bilton, states as follows:

“The tax scandals in Liechtenstein and Switzerland have led both countries finally to commit to OECD standards of exchange bank information. As this Report goes to press, Andorra, Austria, Belgium, Luxembourg and Monaco have followed suit in advance of the next G20 summit in London - as have Hong Kong and Singapore. Taken together, this means that banking secrecy is effectively dead.”

The Organisation for Economic Co-operation and Development (OECD) has a membership of 30 countries and shares expertise and exchanges views with more than 100 other countries including South Africa.

In the double tax treaties entered into by South Africa with more than 70 countries around the globe (with 20 more in the pipeline), there is an article headed “ Exchange of Information”. This entitles and obligates the tax authorities of the two countries to exchange tax information with each other to promote tax compliance in their countries.

Tax residents of South Africa are taxable in South Africa on worldwide income and capital gains. Failure to disclose income and capital gains subject to tax in South Africa is a criminal offence which can lead to a fine or imprisonment (in addition to the tax, penalties and interest thereon).

We strongly advise those who have assets (undisclosed to SARS) outside of South Africa (whether legally held or not from an Exchange Control point of view), to disclose to SARS the income and capital gains thereon. At your request, we are able to assist you to bring your tax affairs up to date by making disclosure to SARS of that which needs to be disclosed.

Please contact us should you require assistance in this regard.