The Organisation for Economic Co-Operation and Development (OECD) developed the Standard for the Automatic Exchange of Financial Account Information in Tax Matters. The Standard encompasses the Common Reporting Standard (CRS).
Reporting Financial Institutions in participating jurisdictions are required to determine and report on financial account information of foreign tax residents to the financial institutions’ local Tax Authority. Such information is then automatically exchanged annually between jurisdictions where there is a treaty and a basis for such exchange (or retained by the local Tax Authority in the absence of a legal basis for exchange).
On 9 October 2020, the South African Minister of Finance, Tito Mboweni, gazetted new regulations (reflecting changes to the CRS) required to enable South Africa to comply with its treaty obligations. These new regulations will repeal the 2 March 2016 regulations (that gives effect to the CRS in South Africa).
The new regulations are expected to come into effect from 1 June 2021.
The regulations contain 11 sections that address the following matters:
Paragraph B of Section XI (Mandatory Disclosure Rules), inter alia, gives effect to an intermediary’s obligation to disclose a CRS Avoidance Arrangement or Opaque Offshore Structures to the South African Revenue Service and will come into effect on 1 March 2023.
For additional information with respect to this Alert, please contact the following: