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A number of South African individuals, trusts and companies feature in the recent data leak involving clients of Panamanian law firm Mossack Fonseca. Taxand South Africa investigates the case further.
Although the publication of the data by the International Consortium of Investigative Journalists does not allege any violation of tax laws or exchange control regulations by those identified in it, the South African Revenue Service (SARS) and the South African Reserve Bank (SARB) have indicated that they will be investigating the tax and exchange control affairs of these South Africans. As a result, those named in the leak should consider urgent steps to address any potential tax or exchange control transgressions.
According to a recent IOL report, SARS has already identified 1700 of the South Africans listed in the leaked data, which is publicly available on the International Consortium of Investigative Journalists’ website. The SARB is also reportedly in the process of checking the leaked information against its cross-border reporting records.
It appears from IOL’s discussions with SARS and the SARB representatives that the timeline of their investigations could be such that most of the listed South African individuals, trusts and companies will not be able to make use of the special tax and exchange control voluntary disclosure programmes (special VDPs) to regularise their affairs if required. These special VDPs are scheduled to begin on 1 October 2016.
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Those named in the data leak should consider urgent steps to regularise any potential tax or exchange control transgressions. This can be done by submitting an application to SARS and/or the SARB through one or both of the aforementioned existing channels provided such an application is submitted before these authorities initiate formal investigations into the relevant South Africans’ affairs.