The three benefits of a VDP

Simangele Mzizi, Fsp Business, 10 Sep. 2014

Tags: vdp, sars, benefits of a vdp

In 2010, SARS introduced the Voluntary Disclosure Programme (VDP). SARS set this campaign up to encourage taxpayers to voluntarily admit to making a mistake on their returns.

Due to the overwhelming response from taxpayers who wanted to sort out their tax affairs, SARS decided to make VDP a permanent programme.

So a VDP has been with us for quite a while, but many taxpayers are still not aware of the benefits it has to offer.

That’s why today we’ve decided to highlight three of the major benefits of a VDP so you can take advantage of it and avoid prosecution and penalties from SARS.

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These are the three benefits of a VDP

If you qualify for a VDP, you’ll reap these benefits:

Benefit #1: If you remedy all non-compliance, SARS will grant you 100% relief for an administrative non-compliance penalty. The relief excludes penalties for the late submission of returns or for the late payment of tax;

Benefit #2: SARS will give you relief for an understatement penalty.

The Practical Tax Loose Leaf Service explains that if during a year-end audit SARS finds that you understated output tax, it’ll adjust this with an assessment, it’ll also add penalties and interest and a further understatement penalty! BUT, if you go the VDP route, you can avoid this additional cash outlay; and

Benefit #3: SARS won’t pursue criminal prosecution if you apply for a VDP.

The great thing about a VDP is that any individual or company who want to voluntary disclose their tax affairs to SARS can apply for it provided they qualify.

To apply, fill in the form called the Voluntary Disclosure Application Form (VDP01). You’ll get it on SARS’ eFiling system.

Now that you know the benefits of a VDP, take advantage of it if you haven’t been compliant with your tax affairs to avoid prosecution and penalties from SARS.

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