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article3bThe Tax Administration Act No 28 of 2011 allows any person to apply for voluntary disclosure relief.

This voluntary disclosure relief applies to all taxes administered by SARS, except Customs and Excise.

The application, supporting documentation and other information regarding this voluntary disclosure is confidential and may not be shared with any other division of SARS.

The benefits of this voluntary disclosure program (VDP) are:

  • Immunity against criminal prosecution for any statutory offence under a tax Act as a result of the default.
  • Partial relief in respect of understatement penalties imposed in terms of the Tax Administration Act.
  • Full relief in respect of administrative non-compliance penalties imposed in terms of the Tax Administration Act.
  • Full relief in respect of penalties imposed in terms of other tax Acts (the Income Tax or VAT Act), but excluding
    • Penalties for the late submission of a return, and
    • Penalties for the late payment of tax.

The requirements for a valid VDP application are:

  • The disclosure must be voluntary.
  • The application must disclose a default that has not previously been disclosed to SARS by the applicant.
  • The application must be full and complete in all material respects.
  • The application must involve the potential imposition of an understatement penalty in respect of the default.
  • The application may not result in a refund due by SARS.
  • The application must be made in the prescribed form and manner.

It is possible for a person to make an application for voluntary disclosure if there is an audit or investigation pending, if SARS believes that:

  • The default would not otherwise have been detected during the audit or investigation, and
  • The application would be in the interest of good management of the tax system and the best use of SARS’ resources.

The application form VDP01 can only be obtained, completed and submitted via SARS e-Filing ( If a person does not have access to internet or computer facilities, they may visit a SARS branch office, where a staff member of SARS will complete and submit the application via e-Filing on their behalf.

SARS will evaluate the VDP application and any supporting documentation, and if an applicant meets the above requirements, the Commissioner must grant the relief as set out above. A voluntary disclosure agreement is then drawn up, containing the following information:

  • The rights and obligations of both SARS and the VDP applicant.
  • The material facts of the default.
  • The amount payable by the applicant, stating the understatement penalty separately.
  • The payment arrangements and dates.
  • The relevant undertakings by the parties.

The VDP agreement constitutes a contract and must be signed by both SARS and the applicant.

The Commissioner has the power to:

  • Cancel the VDP agreement if there is a breach of any material term of the agreement.
  • Withdraw the relief if it is established that the applicant failed to disclose a matter that was material to the application, and pursue prosecution for any statutory offence.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

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