Exchange of
information - SA
TAA
• Sec 3(3)(a)
• If SARS, in accordance with—
• (a) an international tax agreement—
• (i) received a request for, is obliged to exchange or wishes to
spontaneously exchange information, SARS may disclose or obtain the
information for transmission to the competent authority of the other
country as if it were relevant material required for purposes of a tax Act
and must treat the information obtained as taxpayer information;
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• (ii) received a request for the conservancy or the collection of an
amount alleged to be due by a person under the tax laws of the
requesting country, SARS may deal with the request under the
provisions of section 185; or
• (iii) received a request for the service of a document which emanates
from the requesting country, SARS may effect service of the document
as if it were a notice, document or other communication required under
a tax Act to be issued, given, sent or served by SARS; or
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• (b) an international tax standard, obtained information of a person,
SARS may retain the information as if it were relevant material required
for purposes of a tax Act and must treat the information obtained as
taxpayer information.
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• “international tax agreement” means –
• (a) an agreement entered into with the government of another country in
accordance with a tax Act; or
• (b) any other agreement entered into between the competent authority
of the Republic and the competent authority of another country relating
to the automatic exchange of information under an agreement referred
to in paragraph (a);
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• “international tax standard” means—
• (a) the OECD Standard for Automatic Exchange of Financial Account
Information in Tax Matters;
• (b) the Country-by-Country Reporting Standard for Multinational Enterprises
specified by the Minister; or
• (c) any other international standard for the exchange of tax-related information
between countries specified by the Minister,
• subject to such changes as specified by the Minister in a regulation issued
under section 257;
USA (FATCA)
• Foreign Account Tax Compliance Act;
• Requires foreign financial institutions (FFIs) to search
records for customers with indicia of a connection to
the US;
• Report assets + income;
• Applies to US persons (irrespective of location);
• Includes US green card holders.
USA (FATCA)
• SA signed intergovernmental agreement with US on 9 June 2014
• Gazetted on 13 February 2015
• Came into force 28 October 2014
USA (FATCA)
How does it work?
• Financial Institution must report accounts to SARS.
• Financial institution includes: banks, a trust, an
association, a partnership, and long-term insurers.
• FI registers on IRS website
• Must exchange the names, addresses, US tax numbers
of US persons
USA (FATCA)
• FI requires to perform due diligence and establish if the holder
financial accounts is a US person.
• Then report to SARS.
• Account exceeds $50 000.
Common Reporting Standards
• OECD approved standards for domestic countries to obtain financial
information from their financial institutions.
• FI share information with the relevant tax authorities.
• Information such as: interest, dividends, capital gains or unreported
assets.
• Reportable account other than from US.
Country-by-country
• Aimed at combating tax avoidance.
• Multinational entities report on operations in every jurisdiction that
they operate.
• Countries report on revenue, profit, or loss before income tax.
• Entity reports.
