South African taxpayers have nowhere left to hide

The South African Revenue Service (SARS) has confirmed that offshore financial secrecy is effectively over, with expanded global automatic information sharing making it increasingly difficult for taxpayers to hide undeclared foreign assets or income.

On 16 February 2026, SARS published updated reporting specifications for Automatic Exchange of Information (AEOI).

These specifications cover both the OECD’s Common Reporting Standard (CRS) and the United States Foreign Account Tax Compliance Act.

According to SARS’s updated jurisdiction and currency code appendices, reporting now covers 253 jurisdictions, and financial reporting can be conducted in 178 currencies.

This includes not only traditional “countries”, but also smaller financial territories and jurisdictions historically associated with offshore banking, such as Jersey and Guernsey.

Boolell Advisory Mauritius Operations Coordinator Gabrielle Kaufmann warned that the message is unmistakable – “offshore financial secrecy is over”.

Kaufmann explained that the publication of the updated specifications, coming into effect on 1 March 2026, reinforces what taxpayers globally have been learning over the past decade.

“International financial reporting is extensive and no longer limited to a handful of major jurisdictions. It is now global, systematic, and standardised,” she said.

Financial institutions worldwide are required to participate in AEOI reporting, and South Africa is firmly embedded in this global reporting network, Kaufmann said.

This network captures offshore financial interests through structured, automatic information exchange between tax authorities as part of the ongoing fight against tax evasion.

“The practical implication is clear – there is no longer any realistic place to hide money in a bank or financial institution without it being reportable somewhere in the global exchange system,” she explained.

“This effectively ends the era where offshore bank accounts could be used as secrecy tools. Offshore accounts may still exist, but they are no longer invisible.”

A global reporting net without gaps

“AEOI provides for the systematic and periodic transmission of ‘bulk’ taxpayer information between jurisdictions under a common reporting framework,” Kaufmann explained.

“This includes various categories of income, account balances, and information concerning the acquisition of significant assets.”

Tax authorities use this data to assess an individual’s net worth and to check their tax records to verify that taxpayers have accurately reported their foreign-sourced income or assets.

In this way, Kaufmann said the AEOI deters tax evasion and promotes voluntary compliance. These global initiatives apply worldwide as a uniform standard.

“The CRS framework is designed to ensure reporting consistency, quality, and predictability of information exchanged between tax authorities,” she said.

“It also requires financial institutions to look through certain entities, including trusts and similar arrangements, to identify controlling persons.”

SARS explained that this results in significant opportunities for the resident country to enhance compliance and make optimal use of the information.

This can be, for example, through automatic matching with domestic compliance information and data analysis.

According to Kaufmann, a major consequence of this shift in global transparency is that many offshore structures have become outdated.

This means that wealth could be “stuck” within legacy structures designed for a very different compliance environment.

“Beneficiaries often hesitate to access funds for fear of triggering tax exposure – a concern that is not unfounded,” she warned.

Kaufmann added that moving funds from an offshore structure into a personal bank account can create unexplained wealth, prompting serious questions about the source of funds and historical compliance.

“If not handled correctly, supported properly, and structured in a defensible way, such a transfer can end in unexpected, expensive tax liabilities,” she said.

“For taxpayers with undeclared offshore accounts or legacy offshore structures established in an earlier era of secrecy, the risk landscape has fundamentally changed.”

Kaufmann said automatic reporting means relevant information may already be accessible by tax authorities. Proactive engagement with expert advisors is essential.

“Legacy arrangements should be reviewed and, where necessary, converted into more modern, fit-for-purpose vehicles that align with today’s compliance reality and the realities of internationally connected families,” she said.

“Offshore wealth itself is not unlawful. But undisclosed offshore wealth and undeclared income are increasingly indefensible.”