South Africa Implements Mandatory Disclosure Rules for Tax Compliance

In a move to enhance international tax compliance, South Africa has officially adopted the Model Mandatory Disclosure Rules (MDR) developed by the Organisation for Economic Cooperation and Development (OECD). This initiative, effective from March 1, 2023, aims to tackle arrangements designed to circumvent reporting under the Common Reporting Standard (CRS) and to shed light on opaque offshore structures.

Under these rules, any person acting as an intermediary in arrangements exhibiting hallmarks of CRS avoidance or opaque offshore structures is obligated to disclose pertinent information to the South African Revenue Service (SARS). Intermediaries include both promoters and service providers involved in the design, marketing, or implementation of such arrangements.

These measures underscore South Africa's commitment to combatting tax evasion and enhancing global tax transparency, aligning with international standards set forth by the OECD.

Who Must Submit Data: Intermediaries with a sufficient link to South Africa, including those operating through branches within the jurisdiction, as well as residents, managers, or entities established under domestic laws.

Intermediaries are those persons responsible for the design or marketing of the arrangement or structure (“Promoters”) as well as certain persons that provide assistance or advice with respect to the design, marketing, implementation or organisation of that arrangement or structure (“Service Providers”).

What Must Be Reported: Information pertaining to CRS avoidance arrangements and opaque offshore structures, encompassing details of the arrangement, involved parties, underlying investments, and relevant tax information.

The description may include references to marketing materials, structure diagrams, presentations and other documents that provide context or explain the structure or arrangement in further detail. It should also include information on all jurisdictions where a CRS Avoidance Arrangement or Opaque Offshore Structure has been made available for implementation.

When Must Information Be Reported: Promoters are required to submit reports within 30 days of making the arrangement available for implementation, while service providers must disclose within 30 days of providing relevant services. Pre-existing arrangements entered on or after 29 October 2014 must be disclosed within 180 days from the effective date.

How Must Information Be Reported: Reporting is exclusively electronic through the SARS eFiling platform, with the MDR tax type activated to complete the MDR001 form.

#Tax A Sured Pty Ltd # OECD

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