The National Treasury and the SA Revenue Service are discussing entering into an inter-governmental agreement (IGA) with the United States on a foreign tax compliant act, Sars said on Thursday.
"The wording of a draft IGA has now been agreed upon and will be signed at governmental level as soon as possible," Sars said in a statement.
"When signed, the US Treasury will view South African financial institutions as being generally compliant with the Foreign Account Tax Compliance Act (FATCA)."
Once the agreement took effect, relevant financial institutions in South Africa would report required information to Sars, which would exchange information with the US under the legal framework provided by the double taxation agreement that existed between both countries, Sars said.
This meant financial institutions in South Africa would be required to obtain information on US citizens in accordance with the IGA, from July 1 and report the information to Sars.
"The first reporting period is 1 July 2014 to 28 February 2015, and the required information will have to be submitted to Sars by June 2015.
"Information will thereafter be submitted annually for every tax year ending February," it said.
The revenue service said South Africa was playing a leading role globally in moving towards greater transparency and exchange on information in tax matters.
This ensured greater trust and fairness in the international tax system.
Sars, Treasury to sign US agreement
The National Treasury and the SA Revenue Service are discussing entering into an inter-governmental agreement (IGA) with the United States on a foreign tax compliant act, Sars said on Thursday.
"The wording of a draft IGA has now been agreed upon and will be signed at governmental level as soon as possible," Sars said in a statement.
"When signed, the US Treasury will view South African financial institutions as being generally compliant with the Foreign Account Tax Compliance Act (FATCA)."
Once the agreement took effect, relevant financial institutions in South Africa would report required information to Sars, which would exchange information with the US under the legal framework provided by the double taxation agreement that existed between both countries, Sars said.
This meant financial institutions in South Africa would be required to obtain information on US citizens in accordance with the IGA, from July 1 and report the information to Sars.
"The first reporting period is 1 July 2014 to 28 February 2015, and the required information will have to be submitted to Sars by June 2015.
"Information will thereafter be submitted annually for every tax year ending February," it said.
The revenue service said South Africa was playing a leading role globally in moving towards greater transparency and exchange on information in tax matters.
This ensured greater trust and fairness in the international tax system.