INDEX !DMINISTRATIVE 0ENALTIEs 14 "OND )NSTALMENT 2EPAYMENTS "ROAD "ASED %MPLOYEE %QUITY "UDGET 0ROPOSALS "URSARIES AND 3CHOLARSHIPS #APITAL 'AINS 4AX #APITAL )NCENTIVE !LLOWANCES #ONNECTED 0ERSONS $EDUCTIONS $ONATIONS $EDUCTIONS %MPLOYEES $EDUCTIONS )NDIVIDUALS $EEMED #APITAL $ISPOSAL OF 3HARES $EEMED %MPLOYEES $IRECTORS 0!9% $IVIDENDS 4AX $ONATIONS 4AX $OUBLE 4AXATION !GREEMENTS AND 7ITHHOLDING 4AXES %NVIRONMENTAL %XPENDITURE %STATE $UTY %XCHANGE #ONTROL 2EGULATIONS %XECUTORS 2EMUNERATION %XEMPTIONS )NDIVIDUALS &ARMING )NCOME &RINGE "ENElTS )NDUSTRIAL 0OLICY 0ROJECTS )NTEREST 2ATES #HANGES ,EARNERSHIP !LLOWANCE ,IMITATION OF $EDUCTIONS -ARRIED IN #OMMUNITY OF 0ROPERTY .ATIONAL #REDIT !CT .ON 2ESIDENTS /FlCIAL )NTEREST 2ATES AND 0ENALTIES 0ASSIVE (OLDING #OMPANY Patent/InteLLECTUAL 0ROPERTY
0RE 0RODUCTION )NTEREST 0RE 4RADING %XPENDITURE 0RIME /VERDRAFT 2ATES 0ROVISIONAL 4AX 0UBLIC "ENElT /RGANISATIONS 2EINVESTMENT 2ELIEF 2ELOCATION OF AN %MPLOYEE 2ESEARCH AND $EVELOPMENT 2ESIDENCE "ASED 4AXATION 2ESIDENTIAL "UILDING !LLOWANCES 2ESTRAINT OF 4RADE 2ETENTION OF $OCUMENTS AND 2ECORDS 2ETIREMENT ,UMP 3UM "ENElTS 2ING &ENCED !SSESSED ,OSSES 2OYALTIES TO .ON 2ESIDENTS 3ECURITIES 4RANSFER 4AX 3KILLS $EVELOPMENT ,EVY 3MALL "USINESS #ORPORATIONS 3TAMP $UTY 3TRATEGIC !LLOWANCES 4AX )MPACT #OMPANIES 4AX 2ATES #OMPANIES 4AX 2ATES )NDIVIDUALS 4AX 2ATES 4RUSTS 4AX 2EBATES 4AX 4HRESHOLDS 4RANSFER $UTY 4RAVEL !LLOWANCES 4RUSTS ,OSSES 4URNOVER 4AX 6ALUE !DDED 4AX 6ALUE %XTRACTION 4AX 6ENTURE #APITAL )NVESTMENTS 7EAR AND 4EAR !LLOWANCES 7ITHDRAWAL ,UMP 3UM "ENElTS
BUDGET
02/0/3!,3
1
Corporate Tax Rate
.O CHANGE TO THE RATE OF CORPORATE TAX
2
VAT
! REVIEW OF THE CLAW BACK FROM DEVELOPERS WHO TEMPORARILY LEASE RESIDENTIAL PROPERTY PRIOR TO SALE IS TAKING PLACE
3
Voluntary Disclosure Program
! 6OLUNTARY $ISCLOSURE 0ROGRAM WILL EXIST FOR MONTHS FROM .OVEMBER .ON COMPLIANT TAXPAYERS MAY USE THIS WINDOW PERIOD TO DISCLOSE AND PAY UNDECLARED TAX LIABILLITIES AT A REDUCED INTEREST CHARGE AND WITHOUT PENALTIES #ONSIDERATION WILL ALSO BE GIVEN TO ALIGN EXCHANGE CONTROL VIOLATION PENALTIES WITH THIS VOLUNTARY DISCLOSURE OPPORTUNITY
4
Discontinuation of the SITE System
4HIS SYSTEM WILL BE REPEALED FROM -ARCH AND RELIEF FOR LOW INCOME EARNERS WITH MULTIPLE SOURCES OF INCOME WILL BE CONSIDERED
5
Retrenchment
4HE 2 EXEMPTION FOR RETRENCHMENT PACKAGES WILL BE ADJUSTED AND ALIGNED WITH THE RETIREMENT AND RETRENCHMENT LUMP SUMS
6
Interest Exemption
)N AN ATTEMPT TO LIMIT TAX PLANNING AIMED AT SHIFTING INCOME THE INTEREST EXEMPTION WILL NOW BE LIMITED TO BANK DEPOSITS GOVERNMENT RETAIL BONDS AND COLLECTIVE INVESTMENT MONEY MARKET FUNDS
7
Post Retirement Lump Sum
,UMP SUM PAYOUTS THAT OCCUR POST RETIREMENT WILL IN FUTURE RECEIVE THE SAME TAX TREATMENT AS LUMP SUMS ON RETIREMENT
8
Limiting Salary Structuring
4HE COMPANY CAR FRINGE BENElT VALUE IS TO BE INCREASED $EFERRED COMPENSATION AND GROUP LIFE INSURANCE SCHEMES PROVIDED BY AN EMPLOYER WILL BE TAXED AS A FRINGE BENElT
9
Further Anti-Avoidance Measures
3OPHISTICATED TAX AVOIDANCE SCHEMES PARTICULARLY THOSE INVOLVING CROSS BORDER TRANSACTIONS ARE LIKELY TO COME UNDER CLOSE SCRUTINY
10
Enhancements to Tax Administration
3!23 IS OF THE OPINION THAT TAX COMPLIANCE HAS DETERIORATED DURING THE RECESSION AND AS A RESULT IT INTENDS TO BOLSTER ITS ENFORCEMENT POLICY 4HIS WILL INCLUDE IMPROVEMENTS TO THE SYSTEM OF ADMINISTRATIVE PROCEDURES AND GREATER FOCUS ON SIGNIlCANT TAXPAYERS AND WEALTHY INDIVIDUALS
11
Estate Duty
%STATE DUTY AND #'4 ARISING ON DEATH ARE TO BE REVIEWED DUE TO THE LOW REVENUE YIELD AND THE USE OF TRUSTS TO MINIMISE TAXES
DIVIDENDS
4!8
$IVIDENDS TAX APPLICABLE TO 3! RESIDENT COMPANIES WILL COME INTO OPERATION AT LEAST THREE MONTHS AFTER A DATE ANNOUNCED BY THE -INISTER $IVIDENDS 4AX WILL BE BORNE BY THE SHAREHOLDER AT A RATE OF SUBJECT TO ANY REDUCTION IN TERMS OF DOUBLE TAXATION AGREEMENTS
Exemptions from Dividends Tax 4HE FOLLOWING SHAREHOLDERS ARE EXEMPT FROM DIVIDENDS TAX 3! RESIDENT COMPANIES THE 'OVERNMENT 0"/ S CERTAIN EXEMPT BODIES REHABILITATION TRUSTS PENSION PROVIDENT AND SIMILAR FUNDS SHAREHOLDERS IN A REGISTERED MICRO BUSINESS PROVIDED THE DIVIDEND DOES NOT EXCEED 2 IN A YEAR OF ASSESSMENT A NATURAL PERSON UPON RECEIPT OF AN INTEREST IN A PRIMARY RESIDENCE AND A NON RESIDENT RECEIVING A DIVIDEND FROM A NON RESIDENT COMPANY WHICH IS LISTED ON THE *3% I E A DUAL LISTED COMPANY
Withholding Tax Obligations in respect of Dividends Tax $IVIDENDS TAX INITIALLY REQUIRES THE COMPANY DECLARING THE DIVIDENDS TO WITHHOLD DIVIDENDS TAX ON PAYMENT (OWEVER LIABILITY FOR WITHHOLDING TAX SHIFTS IF THE DIVIDEND IS PAID TO A REGULATED INTERMEDIARY WHICH INCLUDES CENTRAL SECURITIES DEPOSITORY PARTICIPANTS BROKERS COLLECTIVE INVESTMENT SCHEMES AND LISTED INVESTMENT SERVICE PROVIDERS $IVIDENDS TAX CAN BE REDUCED OR ELIMINATED UPON THE TIMELY RECEIPT OF A WRITTEN DECLARATION THAT THE SHAREHOLDER IS ENTITLED TO AN EXEMPTION OR TO TAX TREATY RELIEF
Use of Unutilised STC Credits 5NUTILISED 34# CREDITS MUST BE UTILISED WITHIN lVE YEARS OF THE CHANGEOVER TO THE DIVIDENDS TAX SYSTEM 34# CREDITS WILL BE EXHAUSTED lRST
Revised Dividend DeямБnition 4HE DElNITION OF A DIVIDEND HAS BEEN SIMPLIlED AND INCLUDES ALL DISTRIBUTIONS TO A SHAREHOLDER OTHER THAN A REDUCTION OF CONTRIBUTED TAX CAPITAL WHICH CONSISTS OF UNTAINTED SHARE PREMIUM AND SHARE CAPITAL OF A COMPANY
CAPITILISATION ISSUES A SHARE BUY BACK OF A *3% LISTED COMPANY OR A REDEMP TION OF A PARTICIPATORY INTEREST IN A FOREIGN COLLECTIVE INVESTMENT SCHEME )N ORDER FOR A DISTRIBUTION OF CONTRIBUTED TAX CAPITAL NOT TO BE REGARDED AS A DIVIDEND THE DIRECTORS MUST IMMEDIATELY PRIOR TO THE DISTRIBUTION RECORD IN WRITING THAT CONTRIBUTED TAX CAPITAL IS BEING DISTRIBUTED
Introduction of Value Extraction Tax (VET) 4HIS IS AN ANTI AVOIDANCE MEASURE SIMILAR TO THE DEEMED DIVIDEND PROVISIONS WHICH WILL BE INTRODUCED WHEN DIVIDENDS TAX IS EFFECTIVE 4HIS IS A SEPARATE TAX LEVIED ON THE COMPANY AND NOT THE SHAREHOLDER 4HIS ARISES ONLY IN RESPECT OF 3OUTH !FRICAN RESIDENT COMPANIES SEEKING TO EXTRACT VALUE WITHOUT DECLARING DIVIDENDS AND IS CALCULATED AT OF THE VALUE EXTRACTED 4HIS IS APPLICABLE WHERE A COMPANY PROVIDES LOW INTEREST LOANS OR ADVANCES TO A SHAREHOLDER RELEASES OR RELIEVES LOANS PREVIOUSLY MADE TO A SHAREHOLDER SETTLES A LOAN OWED BY A SHAREHOLDER TO A THIRD PARTY OR CEASES TO BE A 3OUTH !FRICAN RESIDENT 4HESE ANTI AVOIDANCE RULES APPLY ALSO TO ALL PERSONS WHO ARE CONNECTED PERSONS IN RELATION TO THE SHAREHOLDER
Passive Holding Company 4O PREVENT THE USE OF PRIVATE INVESTMENT COMPANIES AVOIDING THE PAYMENT OF DIVIDENDS TAX PASSIVE HOLDING COMPANIES WHICH EARN MORE THAN OF THEIR GROSS INCOME IN THE FORM OF INTEREST AND DIVIDENDS AND IN WHICH MORE THAN OF THE PARTICIPATION RIGHTS ARE HELD BY lVE OR LESS RESIDENT NATURAL PERSONS WILL BE TAXED AT ON THEIR DIVIDEND INCOME AND AT A RATE OF ON THEIR OTHER TAXABLE INCOME BUT WILL NOT BE REQUIRED TO SUBJECT DIVIDENDS THEY DECLARE TO THE DIVIDENDS TAX
TAX RATES ./2-!, 4!8
#/-0!.)%3
&OR YEARS OF ASSESSMENT ENDING DURING THE FOLLOWING PERIODS !PRIL -ARCH !PRIL -ARCH !PRIL -ARCH !PRIL -ARCH !PRIL -ARCH
Note: #OMPANIES QUALIFYING UNDER THE 4AX (OLIDAY LEGISLATION 3ECTION ( WERE SUBJECT TO TAX AT 4HE 4AX (OLIDAY ENDED ON 3EPTEMBER
Branch ProямБts Tax &OR YEARS OF ASSESSMENT ENDING DURING THE FOLLOWING PERIODS !PRIL -ARCH !PRIL -ARCH !PRIL -ARCH !PRIL -ARCH
Note: !S FROM YEARS OF ASSESSMENT ENDING ON OR AFTER -ARCH THESE RATES APPLY TO THE PROlTS OF A NON RESIDENT COMPANY
STC $IVIDEND DECLARED ON OR AFTER $IVIDEND DECLARED ON OR AFTER $IVIDEND DECLARED ON OR AFTER $IVIDEND DECLARED ON OR AFTER
-ARCH *UNE -ARCH /CTOBER
TAX IMPACT #/-0!.)%3 Tax year
0RIOR TO !FTER
2
2 2
!VAILABLE FOR DISTRIBUTION
4AXABLE INCOME ,ESS .ORMAL TAX ,ESS 34#
4OTAL TAX PAID %FFECTIVE RATE OF TAX
2
2
!SSUMES ALL PROlTS ARE DECLARED AS DIVIDENDS 4
TAX RATES ).$)6)$5!,3 Taxable income 2 2 2 2 2 2 2 2 2 2 2
Rates of tax OF EACH 2 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER
2 2 2 2 2
TAX RATES ).$)6)$5!,3 Taxable income 2 2 2 2 2 2 2 2 2 2 2
Rates of tax OF EACH 2 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER 2 OF THE AMOUNT OVER
2 2 2 2 2
TAX 4(2%3(/,$3 Taxable income 0ERSONS UNDER 0ERSONS OVER
2010
2011
2 2
2 2
TAX 2%"!4%3 Amounts deductible from the tax payable 0ERSONS UNDER 0ERSONS OVER
2010
2011
2 2
2 2
4HESE REBATES ARE NOT AVAILABLE TO EITHER NORMAL OR SPECIAL TRUSTS AND COMPANIES
SKILLS $%6%,/0-%.4 ,%69 4HE 3KILLS $EVELOPMENT !CT SEEKS TO RESTRUCTURE THE EXISTING TRAINING SYSTEM AND UPGRADE THE LEVEL OF SKILLS AND ACCESS TO SKILLS BY WORKERS $IRECTORS REMUNERATION ON THE SAME BASIS AS FOR 0!9% WILL BE SUBJECT TO THE 3KILLS $EVELOPMENT ,EVY 4HE 3KILLS $EVELOPMENT ,EVY IS PAYABLE BY EMPLOYERS AT A RATE OF OF REMUNERATION AS FROM !PRIL PREVIOUSLY %MPLOYERS PAYING ANNUAL REMUNERATION OF LESS THAN 2 ARE EXEMPT FROM THIS LEVY AS FROM !UGUST
TAX RATES 425343 !.$ Taxable income !LL TAXABLE INCOME
Rate of tax OF EACH 2
3PECIAL TRUSTS ARE TAXED AT THE RATES APPLICABLE TO INDIVIDUALS ! special trust IS ONE CREATED SOLELY FOR THE BENElT OF A PERSON AFFECTED BY A MENTAL ILLNESS OR SERIOUS PHYSICAL DISABILITY WHICH PREVENTS THAT PERSON FROM EARNING SUFlCIENT INCOME TO MAINTAIN HIMSELF OR A TESTAMENTARY TRUST ESTABLISHED SOLELY FOR THE BENElT OF MINOR CHILDREN WHO ARE RELATIVES OF THE DECEASED 7HERE THE PERSON FOR WHOSE BENElT THE TRUST WAS ESTABLISHED DIES PRIOR TO OR ON THE LAST DAY OF THE YEAR OF ASSESSMENT OR THE YOUNGEST BENElCIARY IN THE CASE OF A TESTAMENTARY TRUST TURNS YEARS OF AGE PRIOR TO OR ON THE LAST DAY OF THE YEAR OF ASSESSMENT THE TRUST WILL NO LONGER BE REGARDED AS A SPECIAL TRUST
TRUSTS ,/33%3 ! LOSS INCURRED BY A TRUST CANNOT BE DISTRIBUTED TO BENElCIARIES 4HE LOSS IS RETAINED IN THE TRUST AND CARRIED FORWARD TO THE NEXT YEAR AS AN ASSESSED LOSS
ROYALTIES TO ./. 2%3)$%.43 !S FROM *ANUARY NO DEDUCTION WILL BE ALLOWED IN RESPECT OF ROYALTY PAYMENTS IF s s
THE INTELLECTUAL PROPERTY WAS AT ANY TIME WHOLLY OR PARTLY OWNED BY A 3OUTH !FRICAN RESIDENT OR THE TAXPAYER OR THE INTELLECTUAL PROPERTY WAS DEVELOPED BY THE TAXPAYER OR A CONNECTED PERSON WHO IS A RESIDENT
)F THE ROYALTY IS SUBJECT TO A WITHHOLDING TAX AT A RATE OF AT LEAST THEN A DEDUCTION OF ONE THIRD OF THE ROYALTY WILL BE ALLOWED
CONNECTED 0%23/.3 7HERE A DEPRECIABLE ASSET IS ACQUIRED BY A TAXPAYER AND IT WAS HELD BY A CONNECTED PERSON WITHIN A PERIOD OF TWO YEARS BEFORE THAT ACQUISITION THE PURCHASER MAY CLAIM CAPITAL ALLOWANCES ON THE LOWER OF THE PURCHASE PRICE OR THE FOLLOWING DEEMED COST s THE NET TAX VALUE OF THE ASSET TO THE SELLER PLUS s THE RECOUPMENT ON THE DISPOSAL BY THE SELLER PLUS s THE TAXABLE CAPITAL GAIN ON THE DISPOSAL BY THE SELLER
TAXATION $%%-%$ %-0,/9%%3 ,ABOUR BROKERS AND PERSONAL SERVICE PROVIDERS ARE REGARDED AS DEEMED EMPLOYEES &OR YEARS OF ASSESSMENT COMMENCING ON OR AFTER -ARCH s A labour broker IS A NATURAL PERSON WHO FOR REWARD PROVIDES A CLIENT WITH OTHER PERSONS TO RENDER A SERVICE FOR THE CLIENT OR PROCURES SUCH OTHER PERSONS FOR THE CLIENT AND REMUNERATES SUCH PERSONS s A personal service provider IS A COMPANY INCLUDING A CLOSE CORPORATION OR TRUST WHERE ANY SERVICE RENDERED ON BEHALF OF THE ENTITY TO ITS CLIENT IS RENDERED PERSONALLY BY ANY PERSON WHO IS A CONNECTED PERSON IN RELATION TO SUCH ENTITY AND ONE OF THE FOLLOWING PROVISIONS APPLY THE PERSON WOULD HAVE BEEN REGARDED AS AN EMPLOYEE OF THE CLIENT IF THE SERVICE WAS NOT RENDERED THROUGH AN ENTITY OR THE PERSON OR ENTITY RENDERING THE SERVICE MUST PERFORM SUCH SERVICE MAINLY AT THE PREMISES OF THE CLIENT AND SUCH PERSON OR ENTITY IS SUBJECT TO THE CONTROL OR SUPERVISION OF SUCH CLIENT AS TO THE MANNER IN WHICH THE DUTIES ARE PERFORMED OR s
MORE THAN OF THE INCOME DERIVED FROM SERVICES RENDERED IS RECEIVED FROM ONE CLIENT OR ASSOCIATED PERSON IN RELATION TO THE CLIENT 4HE ENTITY WILL HOWEVER NOT BE REGARDED AS A personal service provider WHERE SUCH ENTITY EMPLOYS THREE OR MORE FULL TIME EMPLOYEES THROUGHOUT THE YEAR OF ASSESSMENT NONE OF WHOM ARE CONNECTED PERSONS IN RELATION TO SUCH ENTITY
Implications s s s s s
! LABOUR BROKER NOT IN POSSESSION OF AN EXEMPTION CERTIlCATE WILL BE SUBJECT TO 0!9% AT THE RATES APPLICABLE TO INDIVIDUAL TAXPAYERS ! PERSONAL SERVICE PROVIDER WILL BE SUBJECT TO 0!9% AT THE RATE OF IN THE CASE OF A COMPANY AND IN THE CASE OF A TRUST .O 0!9% WILL BE REQUIRED TO BE DEDUCTED WHERE THE ENTITY PROVIDES AN AFlDAVIT CONlRMING THAT IT DOES NOT RECEIVE MORE THAN OF ITS INCOME FROM ONE SOURCE 4HE DEEMED EMPLOYEE MAY APPLY TO 3!23 FOR A TAX DIRECTIVE FOR A LOWER RATE OF TAX $EDUCTIONS AVAILABLE TO DEEMED EMPLOYEES WILL BE LIMITED TO REMUNERATION FOR SERVICES RENDERED CONTRIBUTIONS TO PENSION
PROVIDENT AND BENElT FUNDS LEGAL EXPENSES BAD DEBTS EXPENSES IN RESPECT OF PREMISES lNANCE CHARGES INSURANCE REPAIRS FUEL AND MAINTENANCE IN RESPECT OF ASSETS USED WHOLLY AND EXCLUSIVELY FOR TRADE AND ANY AMOUNT PREVIOUSLY INCLUDED IN TAXABLE INCOME AND SUBSEQUENTLY REFUNDED BY THE RECIPIENT
TAXATION 3-!,, "53).%33 #/20/2!4)/.3 9EARS OF ASSESSMENT ENDING BETWEEN !PRIL AND -ARCH
Taxable income
Rates of tax
2 2 .IL 2 2 OF THE AMOUNT OVER 2 2 2 OF THE AMOUNT OVER 2 9EARS OF ASSESSMENT ENDING BETWEEN !PRIL AND -ARCH
Taxable income
Rates of tax
2 2 .IL 2 2 OF THE AMOUNT OVER 2 2 2 OF THE AMOUNT OVER 2
Applies if: s s s
!LL SHAREHOLDERS OR MEMBERS THROUGHOUT THE YEAR OF ASSESSMENT ARE NATURAL PERSONS WHO HOLD NO SHARES IN ANY OTHER private COMPANIES OR MEMBERS INTEREST IN ANY OTHER CLOSE CORPORATIONS OR CO OPERATIVES OTHER THAN THOSE WHICH ARE INACTIVE AND HAVE ASSETS OF LESS THAN 2 'ROSS INCOME FOR THE YEAR OF ASSESSMENT DOES NOT EXCEED 2 MILLION 2 MILLION .OT MORE THAN OF THE GROSS INCOME AND ALL THE CAPITAL GAINS CONSIST COLLECTIVELY OF investment income AND INCOME FROM RENDERING A personal service Investment income INCLUDES ANY ANNUITY INTEREST RENTAL INCOME
ROYALTY OR ANY INCOME OF A SIMILAR NATURE AS WELL AS DIVIDENDS AND ANY PROCEEDS DERIVED FROM INVESTMENT OR TRADING IN lNANCIAL INSTRUMENTS INCLUDING FUTURES OPTIONS AND OTHER DERIVATIVES
MARKETABLE SECURITIES OR IMMOVABLE PROPERTY Personal service INCLUDES ANY SERVICE IN THE lELD OF ACCOUNTING
ACTUARIAL SCIENCE ARCHITECTURE AUCTIONEERING AUDITING BROADCASTING BROKING COMMERCIAL ARTS CONSULTING DRAUGHTSMANSHIP EDUCATION ENGINEERING ENTERTAINMENT HEALTH INFORMATION TECHNOLOGY
JOURNALISM LAW MANAGEMENT PERFORMING ARTS REAL ESTATE RESEARCH SECRETARIAL SERVICES SPORT SURVEYING TRANSLATION VALUATION OR VETERINARY SCIENCE WHICH IS PERFORMED PERSONALLY BY ANY PERSON WHO HOLDS AN INTEREST IN THE COMPANY OR CLOSE CORPORATION EXCEPT WHERE SUCH SMALL BUSINESS CORPORATION EMPLOYS THREE OR MORE UNCONNECTED FULL TIME EMPLOYEES FOR CORE OPERATIONS s 4HE COMPANY CO OPERATIVE OR CLOSE CORPORATION IS NOT AN EMPLOYMENT ENTITY
Investment incentive 4HE FULL COST OF ANY ASSET USED IN A PROCESS OF MANUFACTURE AND BROUGHT INTO USE FOR THE lRST TIME ON OR AFTER !PRIL MAY BE DEDUCTED IN THE TAX YEAR IN WHICH THE ASSET IS BROUGHT INTO USE !S FROM !PRIL ALL OTHER DEPRECIABLE ASSETS ARE WRITTEN OFF ON A BASIS
EXEMPTIONS s s s s
).$)6)$5!,3
$IVIDENDS RECEIVED OR ACCRUED FROM 3OUTH !FRICAN COMPANIES ARE GENERALLY NOT SUBJECT TO TAX !LL INTEREST RECEIVED BY OR ACCRUED TO NON RESIDENTS IS EXEMPT FROM TAX PROVIDED THE INDIVIDUAL IS PHYSICALLY ABSENT FROM 3OUTH !FRICA FOR AT LEAST DAYS AND DID NOT CARRY ON BUSINESS IN 3OUTH !FRICA THROUGH A PERMANENT ESTABLISHMENT DURING THE YEAR OF ASSESSMENT )NTEREST RECEIVED BY RESIDENT NATURAL PERSONS 0ERSONS UNDER YEARS 2 2 0ERSONS AGED YEARS AND OVER 2 2 )NTEREST INCLUDES DISTRIBUTIONS FROM PROPERTY UNIT TRUSTS AND FOREIGN INTEREST AND DIVIDENDS 4HE FOREIGN INTEREST AND DIVIDEND EXEMPTION IS LIMITED TO 2 2 5NEMPLOYMENT INSURANCE BENElTS
Termination lump sums received from employer ! ONCE OFF EXEMPTION OF 2 APPLLIES IF s THE EMPLOYEE HAS REACHED THE AGE OF YEARS OR s THE TERMINATION OF SERVICES ARE DUE TO ILL HEALTH OR s THE EMPLOYEE WAS RETRENCHED BECAUSE THE EMPLOYER HAS CEASED TO OPERATE OR BECAUSE OF PERSONNEL REDUCTION 4HIS EXEMPTION DOES NOT APPLY TO DIRECTORS OF COMPANIES OR MEMBERS OF CLOSE CORPORATIONS IF THEY AT ANY TIME HELD AN INTEREST OF MORE THAN IN THAT ENTITY 4HE TAXABLE PORTION IS TAXED IN TERMS OF THE RATING FORMULA
Compensation !S FROM -ARCH COMPENSATION AWARDS PAID BY AN EMPLOYER ON THE DEATH OF AN EMPLOYEE IN THE COURSE OF EMPLOYMENT WILL BE EXEMPT TO THE EXTENT OF 2 LESS ANY PREVIOUS RETRENCHMENT EXEMPTION ENJOYED BY THAT EMPLOYEE
DEDUCTIONS %-0,/9%%3 %MPLOYEES OR HOLDERS OF OFlCE WHO DERIVE REMUNERATION ARE RESTRICTED IN DEDUCTING EXPENDITURE INCURRED WHICH RELATES TO EMPLOYMENT TO THE FOLLOWING s $EDUCTIONS IN RESPECT OF CONTRIBUTIONS TO A PENSION FUND OR RETIREMENT annuity fund s ,EGAL EXPENSES s 7EAR AND TEAR ALLOWANCE s "AD DEBTS ALLOWANCE s $OUBTFUL DEBTS ALLOWANCE s 0REMIUMS PAID IN TERMS OF AN ALLOWABLE INSURANCE POLICY TO THE EXTENT THAT THE POLICY COVERS THE PERSON AGAINST LOSS OF INCOME AS A RESULT OF ILLNESS INJURY DISABILITY OR UNEMPLOYMENT AND IN RESPECT OF WHICH ALL AMOUNTS PAYABLE IN TERMS OF THE POLICY CONSTITUTES INCOME AS DElNED s (OME OFlCE EXPENSES SUBJECT TO REQUIREMENTS s 2EFUNDED AWARDS FOR SERVICES RENDERED AND REFUNDED RESTRAINT OF TRADE AWARDS AS FROM -ARCH
DEDUCTIONS ).$)6)$5!,3 Current pension fund contributions OF REMUNERATION FROM RETIREMENT FUNDING EMPLOYMENT OR 2 WHICHEVER IS THE GREATER 2ETIREMENT FUNDING EMPLOYMENT REFERS TO INCOME WHICH IS TAKEN INTO ACCOUNT TO DETERMINE CONTRIBUTIONS TO A PENSION OR PROVIDENT FUND %XCESS CONTRIBUTIONS ARE NOT CARRIED FORWARD TO THE NEXT YEAR OF ASSESSMENT BUT ARE ACCUMULATED FOR THE PURPOSE OF DETERMINING THE TAX FREE PORTION OF THE LUMP SUM UPON RETIREMENT
Arrear pension fund contributions 5P TO A MAXIMUM OF 2 PER ANNUM !NY EXCESS MAY BE CARRIED FORWARD
Current retirement annuity fund contributions OF TAXABLE INCOME FROM NON RETIREMENT FUNDING EMPLOYMENT OR 2 LESS CURRENT CONTRIBUTIONS TO A PENSION FUND OR 2 WHICHEVER IS THE GREATER
Reinstated retirement annuity fund contributions 5P TO A MAXIMUM OF 2 PER ANNUM !NY EXCESS MAY BE CARRIED FORWARD
Medical expenses and medical aid deductions s s s s s s s s
65 years and older: -AY CLAIM ALL QUALIFYING EXPENDITURE INCURRED AND MEDICAL AID CONTRIBUTIONS PAID BY THE TAXPAYER OR EMPLOYER Younger than 65 years: -AY CLAIM MEDICAL AID CONTRIBUTIONS PAID BY THE TAXPAYER OR EMPLOYER UP TO THE CAPPED AMOUNT AND QUALIFYING EXPENDITURE TO THE EXTENT THAT IT EXCEEDS OF TAXABLE INCOME BEFORE THIS DEDUCTION Younger than 65 years (but with an immediate family member who has a disability): )F THE TAXPAYER SPOUSE OR CHILD INCLUDING AN ADOPTED CHILD OR STEPCHILD HAS A DISABILITY THE DEDUCTION ALLOWED IS ALL QUALIFYING EXPENDITURE AND MEDICAL AID CONTRIBUTIONS PAID BY THE TAXPAYER OR EMPLOYER 4HE CAPPED AMOUNT IS CALCULATED AT 2 2 FOR EACH OF THE lRST TWO BENElCIARIES AND 2 2 FOR EACH ADDITIONAL BENElCIARY AS DElNED BY THE MEDICAL AID FUND 1UALIFYING EXPENDITURE INCLUDES OWN CONTRIBUTIONS TO MEDICAL AID FUNDS IN EXCESS OF CAPPED AMOUNT MEDICAL AID FRINGE BENElT DETERMINED BY THE EMPLOYER IN EXCESS OF CAPPED AMOUNT PAYMENTS TO MEDICAL PRACTITIONERS NURSING HOMES AND HOSPITALS PAYMENTS TO PHARMACISTS FOR PRESCRIBED MEDICINES PAYMENTS FOR PHYSICAL DISABILITIES INCLUDING REMEDIAL TEACHING AND COSTS INCURRED FOR MENTALLY HANDICAPPED PERSONS PAYMENTS FOR THE BENElT OF ANY DEPENDENTS Disability MEANS A MODERATE TO SEVERE LIMITATION OF A PERSON S ABILITY TO FUNCTION OR PERFORM DAILY ACTIVITIES AS A RESULT OF PHYSICAL SENSORY
COMMUNICATION INTELLECTUAL OR MENTAL IMPAIRMENT IF THE LIMITATION LASTS MORE THAN A YEAR AND IS DIAGNOSED BY A REGISTERED MEDICAL PRACTITIONER 2ECOVERIES OF EXPENSES INCLUDING AMOUNTS RECEIVED FROM MEDICAL AID SAVINGS ACCOUNT REDUCE THE CLAIM %XPENDITURE PAID BY A TAXPAYER ON BEHALF OF A SPOUSE OR CHILDREN CAN ONLY BE CLAIMED IN THE TAXPAYER S OWN TAX RETURN
RETIREMENT ,5-0 35- "%.%&)43 !S FROM /CTOBER THE taxable portion OF A LUMP SUM FROM A PENSION PROVIDENT OR RETIREMENT ANNUITY FUND ON RETIREMENT OR DEATH IS THE LUMP SUM LESS ANY CONTRIBUTIONS THAT HAVE NOT BEEN ALLOWED AS A TAX DEDUCTION plus the taxable portion of all lump sums previously received 4HIS AMOUNT IS SUBJECT TO TAX AT THE FOLLOWING RATES Less any tax previously paid:
Taxable portion of lump sum
Rates of tax
2 2 2 2 OF THE AMOUNT OVER 2 2 2 2 OF THE AMOUNT OVER 2 2 2 OF THE AMOUNT OVER 2 4HE TAXABLE LUMP SUM CANNOT BE SET OFF AGAINST ANY ASSESSED LOSS OF THE TAXPAYER
WITHDRAWAL
,5-0 35- "%.%&)43
!S FROM -ARCH THE taxable portion OF A PRE RETIREMENT LUMP SUM FROM A PENSION OR PROVIDENT FUND IS THE WITHDRAWAL LESS ANY TRANSFER TO A NEW fund plus all withdrawal lump sums previously received 4HIS AMOUNT IS SUBJECT TO TAX AT THE FOLLOWING RATES less any tax previously paid:
Taxable portion of withdrawal
Rates of tax
2 2 2 2 OF THE AMOUNT OVER 2 2 2 2 OF THE AMOUNT OVER 2 2 2 OF THE AMOUNT OVER 2
RING-FENCED !33%33%$ ,/33%3 !S FROM -ARCH LOSSES FROM SECONDARY TRADES WILL BE RING FENCED AND WILL NOT BE AVAILABLE FOR SET OFF AGAINST INCOME FROM ANY OTHER TRADE )T WILL ONLY APPLY TO AN INDIVIDUAL WHOSE TAXABLE INCOME BEFORE SETTING OFF ANY ASSESSED LOSS OR BALANCE OF ASSESSED LOSS IS EQUAL TO OR EXCEEDS THE LEVEL AT WHICH THE MAXIMUM RATE OF TAX IS APPLICABLE &OR THE RESTRICTIONS TO APPLY THE PERSON MUST HAVE INCURRED AN ASSESSED LOSS FROM THE SECONDARY TRADE IN AT LEAST THREE YEARS OF ASSESSMENT DURING ANY lVE YEAR PERIOD OR HAVE CARRIED ON ANY OF THE FOLLOWING @SUSPECT TRADES s !NY SPORTING ACTIVITIES s !NY DEALING IN COLLECTABLES s 4HE RENTAL OF ACCOMMODATION VEHICLES AIRCRAFT OR BOATS UNLESS AT LEAST OF THE ASSET IS USED BY PERSONS WHO ARE NOT RELATIVES OF SUCH PERSON FOR AT LEAST HALF OF THE YEAR OF ASSESSMENT s !NIMAL SHOWING s &ARMING OR ANIMAL BREEDING OTHERWISE THAN ON A FULL TIME BASIS s 0ERFORMING OR CREATIVE ARTS s 'AMBLING OR BETTING 4HE TAXPAYER WILL BE ABLE TO CIRCUMVENT THESE PROVISIONS WHERE HE CAN PROVE THAT THERE IS A REASONABLE PROSPECT OF DERIVING TAXABLE INCOME WITHIN A REAS ONABLE PERIOD AND WHERE HE COMPLIES WITH OTHER TESTS UNLESS LOSSES HAVE BEEN INCURRED IN CARRYING ON A SUSPECT TRADE IN AT LEAST SIX OUT OF TEN YEARS 11
PROVISIONAL 4!8 !LL PROVISIONAL TAXPAYERS ARE REQUIRED TO REMIT TWO PROVISIONAL TAX PAYMENTS A YEAR ! THIRD VOLUNTARY PAYMENT MAY BE REQUIRED TO AVOID INTEREST BEING CHARGED
First Year of Assessment 7HERE A TAXPAYER HAS NOT BEEN ASSESSED PREVIOUSLY A REASONABLE ESTIMATE OF THE TAXABLE INCOME MUST BE MADE 4HE BASIC AMOUNT CANNOT BE ESTIMATED AT NIL AS WAS PREVIOUS PRACTICE UNLESS FULLY MOTIVATED
First Payment /NE HALF OF THE TOTAL TAX IN RESPECT OF THE ESTIMATED TAXABLE INCOME FOR THE YEAR IS PAYABLE SIX MONTHS BEFORE THE lNANCIAL YEAR END 4HE ESTIMATE OF TAXABLE INCOME MAY NOT BE LESS THAN THE BASIC AMOUNT WITHOUT THE CONSENT OF 3!23
Second Payment ! TWO TIER MODEL APPLIES DEPENDING ON THE TAXPAYER S TAXABLE INCOME s Actual taxable income equal to or less than R1 million 4O AVOID ANY ADDITIONAL TAX ON THE UNDERESTIMATION OF TAXABLE INCOME THIS CAN BE BASED ON THE BASIC AMOUNT AS DElNED OR IF A LOWER ESTIMATE IS USED THE ESTIMATE MUST BE WITHIN OF THE TAXABLE INCOME lNALLY ASSESSED s Actual taxable income exceeds R1 million 4O AVOID ANY ADDITIONAL TAX ON THE UNDERESTIMATION THE ESTIMATE MUST BE WITHIN OF THE TAXABLE INCOME lNALLY ASSESSED )F THE ABOVE REQUIREMENTS ARE NOT MET A PENALTY OF OF THE PROVISIONAL TAX UNDERPAID MAY BE IMPOSED
Third Payment 4HIRD PROVISIONAL PAYMENTS ARE ONLY APPLICABLE TO INDIVIDUALS AND TRUSTS WITH TAXABLE INCOME IN EXCESS OF 2 AND COMPANIES AND CLOSE CORPORATIONS WITH TAXABLE INCOME IN EXCESS OF 2 3UCH PAYMENTS SHOULD BE MADE BEFORE 3EPTEMBER IN THE CASE OF A TAXPAYER WITH A &EBRUARY YEAR END AND WITHIN SIX MONTHS OF OTHER YEAR ENDS TO AVOID INTEREST BEING CHARGED
Basic Amount 4HE BASIC AMOUNT IS THE TAXABLE INCOME OF THE LATEST PRECEDING YEAR OF ASSESSMENT INCREASED BY P A IF THAT ASSESSMENT IS MORE THAN A YEAR OLD
Permissable Reductions in the Basic Amount #APITAL GAINS AND TAXABLE PORTIONS OF LUMP SUMS ARE NOT INCLUDED IN THE BASIC AMOUNT FOR THE lRST PERIOD OR THE SECOND PERIOD WHERE THE TAXABLE INCOME IS NOT EXPECTED TO EXCEED 2 MILLION )F HOWEVER AN ESTIMATE LOWER THAN THE BASIC AMOUNT IS USED SUCH AMOUNTS MUST BE INCLUDED IN THE ESTIMATE 4HESE AMOUNTS HAVE TO BE INCLUDED IN THE SECOND PROVISIONAL TAX PAYMENTS WHERE THE TAXABLE INCOME IS EXPECTED TO EXCEED 2 MILLION
Estimates 3!23 HAS THE RIGHT TO INCREASE ANY PROVISIONAL TAX ESTIMATE EVEN IF BASED ON THE BASIC AMOUNT TO AN AMOUNT CONSIDERED REASONABLE
Persons over 65 0ERSONS OVER YEARS EXCLUDING DIRECTORS OF COMPANIES AND MEMBERS OF CLOSE CORPORATIONS WHOSE TAXABLE INCOME DOES NOT EXCEED 2 2 ARE EXEMPT FROM PROVISIONAL TAX PROVIDED THAT SUCH INCOME CONSISTS EXCLUSIVELY OF REMUNERATION RENTAL INTEREST OR DIVIDENDS
Persons under 65 0ERSONS UNDER YEARS WHO DO NOT CARRY ON BUSINESS AND WHOSE TAXABLE INCOME DOES NOT EXCEED THE TAX THRESHOLD OR WHOSE INTEREST FOREIGN DIVIDENDS AND RENTAL INCOME DOES NOT EXCEED 2 2 ARE EXEMPT FROM PROVISIONAL TAX
DIRECTORS
0!9%
$IRECTORS OF PRIVATE COMPANIES AND MEMBERS OF CLOSE CORPORATIONS ARE DEEMED TO HAVE RECEIVED A MONTHLY REMUNERATION SUBJECT TO 0!9% CALCULATED IN ACCORDANCE WITH THE FOLLOWING FORMULA 9 4 . 7HERE 9 DEEMED MONTHLY REMUNERATION 4 THE BALANCE OF REMUNERATION PAID OR ACCRUED IN THE LAST YEAR OF ASSESSMENT AFTER THE DEDUCTION OF CONTRIBUTIONS TO PENSION FUNDS
RETIREMENT ANNUITY FUNDS QUALIFYING MEDICAL AID CONTRIBUTIONS AND INCOME PROTECTION PLANS BY THE EMPLOYEE QUALIFYING DONATIONS MADE BY THE EMPLOYER ON BEHALF OF THE EMPLOYEE LUMP SUM AWARDS FROM THE EMPLOYER AND WITHDRAWALS FROM RETIREMENT FUNDS AND SHARE INCENTIVE BENElTS . NUMBER OF COMPLETED MONTHS WHICH THE DIRECTOR MEMBER WAS EMPLOYED BY THE COMPANY CLOSE CORPORATION DURING THE LAST YEAR OF ASSESSMENT !CTUAL REMUNERATION PAID IS STILL SUBJECT TO EMPLOYEES TAX 4HE EMPLOYEES TAX PAYABLE THEREON MUST BE REDUCED BY THE AMOUNT OF EMPLOYEES TAX PAYABLE ON THE DEEMED REMUNERATION 4HE FORMULA CALCULATED REMUNERATION DOES NOT APPLY TO DIRECTORS OF PRIVATE COMPANIES AND MEMBERS OF CLOSE CORPORATIONS WHERE THEY EARN AT LEAST OF THEIR REMUNERATION IN THE FORM OF lXED MONTHLY PAYMENTS
DEEMED CAPITAL $)30/3!, /& 3(!2%3 !S FROM /CTOBER THE PROCEEDS ON THE SALE OF AN EQUITY SHARE OR COLLECTIVE INVESTMENT SCHEME UNIT WILL AUTOMATICALLY BE OF A CAPITAL NATURE IF HELD CONTINUOUSLY FOR AT LEAST THREE YEARS EXCEPT s A SHARE IN A SHAREBLOCK COMPANY s A SHARE IN A NON RESIDENT COMPANY s A HYBRID EQUITY INSTRUMENT 0REVIOUSLY THE TAXPAYER COULD ELECT THAT THE PROCEEDS ON THE SALE OF A LISTED SHARE HELD FOR AT LEAST lVE YEARS BE TREATED AS CAPITAL
ENVIRONMENTAL
%80%.$)452%
%XPENDITURE INCURRED BY A TAXPAYER TO CONSERVE OR MAINTAIN LAND IS DEDUCT IBLE IF IT IS CARRIED OUT IN TERMS OF A BIODIVERSITY MANAGEMENT AGREEMENT WITH A DURATION OF AT LEAST lVE YEARS AND THE LAND USED BY THE TAXPAYER IN HIS TRADE CONSISTS OF INCLUDES OR IS IN CLOSE PROXIMITY TO THE LAND WHICH IS SUBJECT TO THIS AGREEMENT 7HERE THE CONSERVATION OR MAINTENANCE OF LAND OWNED BY THE TAXPAYER IS CARRIED OUT IN TERMS OF A DECLARATION OF AT LEAST YEARS DURATION THE EXPENDITURE INCURRED IS DEEMED TO BE A DONATION TO THE 'OVERNMENT WHICH QUALIlES AS A DEDUCTION UNDER SECTION ! )N CERTAIN CIRCUMSTANCES WHERE THE LAND IS DECLARED A NATIONAL PARK OR NATURE RESERVE AN ANNUAL DONATION BASED ON OF THE LESSER OF COST OR MARKET VALUE OF THE LAND IS DEEMED TO BE MADE TO THE 'OVERNMENT AND QUALIlES FOR A SECTION ! DEDUCTION IN THE YEAR THE DECLARATION IS MADE AND IN EACH OF THE SUBSEQUENT NINE YEARS 2ECOUPMENTS ARISE WHERE THE TAXPAYER BREACHES THE AGREEMENT OR VIOLATES THE DECLARATION
ADMINISTRATIVE
0%.!,4)%3
&AILURE TO SUBMIT CERTAIN RETURNS OR INFORMATION WILL GIVE RISE TO THE FOLLOWING lXED RATE PENALTIES Assessed loss or taxable income for preceding year !SSESSED LOSS 2 n 2 2 n 2 2 n 2 2 n 2 2 n 2 2 n 2 !BOVE 2
Penalty 2 2 2 2 2 2 2 2
4HE PENALTY WILL AUTOMATICALLY BE IMPOSED MONTHLY UNTIL THE TAXPAYER REMEDIES THE NON COMPLIANCE s Late payment of PAYE and provisional tax attracts a penalty of 10% of the amount due. UÊ / iÊ >ÌiÊÃÕL ÃÃ Ê vÊÌ iÊ* 9 ÊÀiV V >Ì Ê>ÌÌÀ>VÌÃÊ>Ê«i > ÌÞÊÊ of 10% of the PAYE deducted for the tax year.
TRAVEL
!,,/7!.#%3
Fixed Travel Allowances !S FROM -ARCH OF THE lXED TRAVEL ALLOWANCE IS SUBJECT TO 0!9% AND THE FULL ALLOWANCE IS DISCLOSED ON THE EMPLOYEE S )20 CERTIlCATE IRRESPECTIVE OF THE QUANTUM OF BUSINESS TRAVEL
Reimbursive Travel Expenses 7HERE AN EMPLOYEE RECEIVES A REIMBURSEMENT BASED ON THE ACTUAL BUSINESS KILOMETRES TRAVELLED NO OTHER COMPENSATION IS PAID TO THE EMPLOYEE AND THE COSTS ARE CALCULATED IN ACCORDANCE WITH THE PRESCRIBED RATE OF CENTS CENTS PER KILOMETRE NO EMPLOYEES TAX NEED BE DEDUCTED PROVIDED THE BUSINESS TRAVEL DOES NOT EXCEED KILOMETRES PER ANNUM 4HE REIMBURSEMENT MUST BE DISCLOSED UNDER CODE ON THE )20 CERTIlCATE .O 0!9% IS WITH HELD AND THE AMOUNT IS NOT SUBJECT TO TAXATION ON ASSESSMENT )F THE BUSINESS KILOMETRES TRAVELLED EXCEED KILOMETRES PER ANNUM OR IF THE REIMBURSIVE RATE PER KILOMETRE EXCEEDS THE PRESCRIBED RATE OR IF OTHER COMPENSATION IS PAID TO THE EMPLOYEE THE ALLOWANCE MUST BE DISCLOSED SEPARATELY UNDER CODE ON THE )20 CERTIlCATE .O 0!9% IS WITHHELD AND THE AMOUNT IS SUBJECT TO TAXATION ON ASSESSMENT 14
DEDUCTIONS 42!6%, %80%.3%3 !CCURATE RECORDS OF THE OPENING AND CLOSING ODOMETER READINGS MUST BE MAINTAINED IN ALL CIRCUMSTANCES 0RIOR TO -ARCH IN THE ABSENCE OF ACCURATE TRAVEL RECORDS THE lRST KILOMETRES TRAVELLED ARE DEEMED PRIVATE TRAVEL AND THE MAXIMUM BUSINESS KILOMETRES WHICH MAY BE CLAIMED ARE LIMITED TO !S FROM -ARCH THE CLAIM MUST BE BASED ON THE ACTUAL DISTANCE TRAVELLED AS SUPPORTED BY A LOG BOOK AND THE DEEMED KILOMETRES METHOD MAY NO LONGER BE USED
$%%-%$ %80%.$)452% Cost of vehicle $OES NOT EXCEED 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2
Fixed R
Fuel Repairs c c
Fixed R
Fuel Repairs c c
$%%-%$ %80%.$)452% Cost of vehicle $OES NOT EXCEED 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2 BUT NOT 2 %XCEEDS 2
FRINGE
"%.%&)43
4HE CASH EQUIVALENT OF TAXABLE BENElTS GRANTED TO EMPLOYEES IS TAXABLE
Use of Company Owned Vehicle 4HE DETERMINED VALUE FOR THE FRINGE BENElT IS THE CASH COST EXCLUDING 6!4
lNANCE CHARGES AND INTEREST 4HE EMPLOYEE WILL BE TAXED ON PER MONTH OF THE DETERMINED VALUE OF THE MOTOR VEHICLE HAVING THE HIGHEST VALUE AND PER MONTH OF THE DETERMINED VALUE OF ANY SECOND OR SUBSEQUENT VEHICLE USED PRIMARILY FOR PRIVATE PURPOSES )F THE EMPLOYEE BEARS THE FULL COST OF s ALL FUEL USED FOR PRIVATE USE INCLUDING TRAVEL BETWEEN PLACE OF RESIDENCE AND EMPLOYMENT THE MONTHLY VALUE IS REDUCED BY 2 s MAINTAINING THE VEHICLE INCLUDING REPAIRS SERVICING LUBRICATION AND TYRES THE MONTHLY VALUE IS REDUCED BY 2 )F THE EMPLOYEE HAS THE USE OF A COMPANY CAR AND RECEIVES A TRAVEL ALLOWANCE FOR ANOTHER VEHICLE THE COMPANY CAR IS TAXED AT OF THE DETERMINED VALUE AND NOT )F THE COSTS FOR THE OTHER VEHICLE ARE REIMBURSED BASED ON ACTUAL DISTANCE TRAVELLED ON BUSINESS AND THE RATE DOES NOT EXCEED CENTS CENTS PER KILOMETRE THE WILL STILL APPLY 4HE PRIVATE USE BY AN EMPLOYEE OF A MOTOR VEHICLE SHALL HAVE NO VALUE IF s THE VEHICLE IS AVAILABLE TO AND USED BY ALL EMPLOYEES AND THE PRIVATE USE IS INFREQUENT AND INCIDENTAL TO ITS BUSINESS USE OR s WHERE THE NATURE OF THE EMPLOYEE S DUTIES REQUIRES REGULAR USE OF THE VEHICLE FOR PERFORMANCE OF DUTIES OUTSIDE NORMAL HOURS OF WORK AND IT IS NOT USED FOR PRIVATE PURPOSES OTHER THAN TRAVEL TO AND FROM WORK 7HERE IT CAN BE SHOWN THAT THE DISTANCE TRAVELLED FOR PRIVATE PURPOSES INCLUDING TRAVELLING BETWEEN THE EMPLOYEE S PLACE OF RESIDENCE AND HIS PLACE OF EMPLOYMENT IS LESS THAN KM THE FRINGE BENElT MAY BE REDUCED UPON ASSESSMENT BY THE RATIO OF THIS DISTANCE TO KM 4HE PROVISION OF A COMPANY CAR RESULTS IN A DEEMED CONSIDERATION AND THUS LIABLE FOR OUTPUT 6!4 FOR THE VENDOR EMPLOYER 4HE DEEMED CONSIDERATION INCLUSIVE OF 6!4 IS AS FOLLOWS -OTOR VEHICLE $OUBLE CAB OF COST OF VEHICLE EXCL 6!4 PER MONTH "AKKIES OF COST OF VEHICLE EXCL 6!4 PER MONTH
Medical Aid Contributions !S FROM -ARCH THE FULL CONTRIBUTION BY AN EMPLOYER IS A FRINGE BENElT 4HE AMOUNT BY WHICH AN EMPLOYER S CONTRIBUTION TO A MEDICAL AID FUND EXCEEDS 2 2 FOR EACH OF THE lRST TWO BENElCIARIES AS DElNED BY THE MEDICAL AID FUND AND 2 2 FOR EACH ADDITIONAL BENElCIARY IS SUBJECT TO 0!9% )F THE EMPLOYER MAKES A LUMP SUM PAYMENT FOR ALL EMPLOYEES THE EFFECTIVE BENElT IS DETERMINED IN ACCORDANCE WITH A FORMULA WHICH WILL HAVE THE EFFECT OF APPORTIONMENT AMONGST ALL EMPLOYEES CONCERNED
Holiday Accommodation 4HE EMPLOYEE IS TAXED ON THE PREVAILING MARKET RATE IF THE PROPERTY IS OWNED BY THE EMPLOYER OR RENTED FROM AN ASSOCIATED ENTITY OR THE ACTUAL RENTAL IF THE EMPLOYER RENTED THE ACCOMMODATION
Long Service and Bravery Awards 4HE lRST 2 OF THE VALUE OF ANY ASSET AWARDED EXCLUDING CASH IS NOT SUBJECT TO TAX
Use of Business Cellphones and Computers !S FROM -ARCH NO TAXABLE VALUE WILL BE PLACED ON THE PRIVATE USE BY EMPLOYEES OF EMPLOYER OWNED CELLPHONES AND COMPUTERS WHICH ARE USED MAINLY FOR BUSINESS PURPOSES
Low Interest/Interest-Free Loans s s s
4HE AMOUNT TAXED IS THE DIFFERENCE BETWEEN INTEREST PAYABLE ON THE LOAN BY THE EMPLOYEE AND THE OFlCIAL INTEREST RATE 3HORT TERM LOANS NOT GRANTED REGULARLY WHICH ARE NOT IN EXCESS OF 2
ARE NOT TAXABLE BENElTS ! LOAN TO THE EMPLOYEE TO ENABLE HIM TO FURTHER HIS OWN STUDIES IS NOT A TAXABLE BENElT
Subsistence Allowances )F AN EMPLOYEE IS OBLIGED TO SPEND AT LEAST ONE NIGHT AWAY FROM HIS USUAL RESIDENCE IN 3OUTH !FRICA ON BUSINESS THE EMPLOYER MAY PAY AN ALLOWANCE FOR PERSONAL SUBSISTENCE AND INCIDENTAL COSTS WITHOUT SUCH AMOUNTS BEING INCLUDED IN THE EMPLOYEE S TAXABLE INCOME SUBJECT TO THE EMPLOYEE TRAVELLING FOR BUSINESS WITHIN THE FOLLOWING MONTH )F SUCH ALLOWANCE IS PAID TO AN EMPLOYEE AND THAT EMPLOYEE DOES NOT TRAVEL FOR BUSINESS PURPOSES BY THE END OF THE FOLLOWING MONTH THE ALLOWANCE BECOMES SUBJECT TO 0!9% IN THAT MONTH )F THE ALLOWANCES DO NOT EXCEED THE AMOUNTS OR PERIODS DETAILED BELOW THE TOTAL ALLOWANCE MUST BE REmECTED UNDER CODE ON THE )20 CERTIlCATE 7HERE THE ALLOWANCES EXCEED THE AMOUNTS OR PERIODS DETAILED BELOW THE TOTAL ALLOWANCE MUST BE REmECTED UNDER CODE ON THE )20 CERTIlCATE 4HE FOLLOWING AMOUNTS ARE DEEMED TO HAVE BEEN EXPENDED BY AN EMPLOYEE IN RESPECT OF A SUBSISTENCE ALLOWANCE Local travel s 2 2 PER DAY OR PART OF A DAY FOR INCIDENTAL COSTS OR s 2 2 PER DAY OR PART OF A DAY FOR MEALS AND INCIDENTAL COSTS 7HERE AN ALLOWANCE IS PAID TO AN EMPLOYEE TO COVER THE COST OF ACCOMMO DATION MEALS OR OTHER INCIDENTAL COSTS THE EMPLOYEE HAS TO PROVE HOW MUCH HE SPENT WHILE AWAY ON BUSINESS 4HIS CLAIM IS LIMITED TO THE ALLOWANCE RECEIVED Overseas travel !CTUAL ACCOMMODATION COSTS PLUS AN ALLOWANCE PER COUNTRY AS SET OUT ON WWW SARS GOV ZA PER DAY FOR MEALS AND INCIDENTAL COSTS INCURRED OUTSIDE 3OUTH !FRICA 4HE DEEMED EXPENDITURE WILL NOT APPLY WHERE THE ABSENCE IS FOR A CONTINUOUS PERIOD IN EXCESS OF SIX WEEKS
Residential Accommodation Supplied by Employer !S FROM -ARCH WHERE ACCOMMODATION IS PROVIDED TO AN EMPLOYEE AND IS NOT OWNED BY THE EMPLOYER OR ASSOCIATED ENTITY THE VALUE OF THE FRINGE BENElT TO BE TAXED SHALL BE THE GREATER OF THE FORMULA VALUE OR THE RENTAL AND OTHER EXPENSES PAID BY THE EMPLOYER 4HE FORMULA WILL NEVERTHELESS APPLY IF IT IS s CUSTOMARY FOR THE INDUSTRY TO PROVIDE FREE OR SUBSIDISED ACCOMMODATION TO EMPLOYEES s NECESSARY FOR THE PARTICULAR EMPLOYER TO PROVIDE FREE ACCOMMODATION FOR PROPER PERFORMANCE OF THE EMPLOYEE S DUTIES OR AS A RESULT OF FREQUENT MOVEMENT OF EMPLOYEES OR LACK OF EXISTING ACCOMMODATION AND s PROVIDED FOR BONA lDE BUSINESS PURPOSES OTHER THAN OBTAINING A TAX BENElT !S FROM -ARCH NO RENTAL VALUE WILL BE PLACED ON THE s SUPPLY OF ACCOMMODATION TO AN EMPLOYEE AWAY FROM HIS USUAL PLACE OF RESIDENCE IN 3OUTH !FRICA FOR THE PERFORMING OF DUTIES s SUPPLY OF ACCOMMODATION IN 3OUTH !FRICA TO AN EMPLOYEE AWAY FROM HIS USUAL PLACE OF RESIDENCE OUTSIDE 3OUTH !FRICA FOR A TWO YEAR PERIOD 4HIS CONCESSION DOES NOT APPLY IF THE EMPLOYEE WAS PRESENT IN 3OUTH !FRICA FOR MORE THAN DAYS IN THE TAX YEAR PRIOR TO THE DATE OF ARRIVAL FOR THE PURPOSE OF HIS DUTIES 4HERE IS A MONTHLY MONETARY CAP OF 2
RELOCATION OF !. %-0,/9%% 4HE FOLLOWING ITEMS OF EXPENDITURE BORNE BY THE EMPLOYER FOR RELOCATION
APPOINTMENT OR TERMINATION ARE EXEMPT FROM TAX s TRANSPORTATION OF THE EMPLOYEE MEMBERS OF HIS HOUSEHOLD AND PERSONAL possessions s HIRING TEMPORARY RESIDENTIAL ACCOMMODATION FOR THE EMPLOYEE AND MEMBERS OF HIS HOUSEHOLD FOR UP TO DAYS AFTER TRANSFER s SUCH COSTS AS 3!23 MAY ALLOW E G NEW SCHOOL UNIFORMS REPLACEMENT OF CURTAINS BOND REGISTRATION AND LEGAL FEES TRANSFER DUTY MOTOR VEHICLE REGISTRATION FEES CANCELLATION OF BOND AND AGENT S FEE ON SALE OF PREVIOUS RESIDENCE %XPENSES WHICH DO NOT QUALIFY ARE LOSS ON SALE OF THE PREVIOUS RESIDENCE AND ARCHITECT S FEES FOR DESIGN OF OR ALTERATIONS TO A NEW RESIDENCE
PUBLIC "%.%&)4 /2'!.)3!4)/.3 !N ORGANISATION WILL QUALIFY AS A 0UBLIC "ENElT /RGANISATION 0"/ IF IT CARRIES OUT ONE OR MORE PUBLIC BENElT ACTIVITIES IN A NON PROlT MANNER SUBSTANTIALLY IN 3OUTH !FRICA ! PUBLIC BENElT ACTIVITY INCLUDES THE ACTIVITIES AS SET OUT IN THE .INTH 3CHEDULE TO THE !CT AS WELL AS ACTIVITIES APPROVED BY THE -INISTER OF &INANCE IN THE 'AZETTE
DEDUCTIONS $/.!4)/.3 $ONATIONS TO CERTAIN DESIGNATED 0"/ S WILL QUALIFY FOR A TAX DEDUCTION Individuals LIMITED TO OF TAXABLE INCOME BEFORE THE DEDUCTION OF DONATIONS AND MEDICAL EXPENSES Companies LIMITED TO OF TAXABLE INCOME BEFORE THE DEDUCTION OF DONATIONS
RESIDENTIAL BUILDING Asset type
!,,/7!.#%3
Conditions for annual allowance
Annual allowance
2ESIDENTIAL BUILDINGS
"UILDING PROJECTS ERECTED ON OR AFTER !PRIL OF COST AND AN AND BEFORE /CTOBER CONSISTING OF AT LEAST INITIAL ALLOWANCE OF lVE UNITS OF MORE THAN ONE ROOM INTENDED FOR OF COST LETTING OR OCCUPATION BY BONA lDE FULL TIME EMPLOYEES
.EW AND UNUSED BUILDINGS ACQUIRED ERECTED OR IMPROVED ON OR AFTER /CTOBER IF SITUATED ANYWHERE IN 3OUTH !FRICA AND OWNED BY THE TAX PAYER FOR USE IN HIS TRADE EITHER FOR LETTING OR AS EMPLOYEE ACCOMMODATION %NHANCED ALLOWANCES ARE AVAILABLE WHERE THE LOW COST RESIDENTIAL UNIT IS SITUATED IN AN URBAN DEVELOPMENT ZONE
OF COST OR OF COST FOR LOW COST RESIDENTIAL UNITS NOT EXCEEDING 2 FOR A STAND ALONE UNIT OR 2 IN THE CASE OF AN APARTMENT
%MPLOYEE HOUSING
OF THE COSTS INCURRED OR FUNDS ADVANCED OR DONATED TO lNANCE THE ERECTION OF HOUSING FOR EMPLOYEES ON OR BEFORE /CTOBER SUBJECT TO A MAXIMUM PER DWELLING
2 PRIOR TO -ARCH 2 BETWEEN -ARCH AND /CTOBER
%MPLOYEE HOUSING LOANS
!LLOWANCE ON AMOUNTS OWING ON INTEREST FREE LOAN ACCOUNT IN RESPECT OF LOW COST RESIDENTIAL UNITS SOLD AT COST BY THE TAXPAYER TO EMPLOYEES AND SUBJECT TO REPURCHASE AT COST ONLY IN CASE OF REPAYMENT DEFAULT OR TERMINATION OF EMPLOYMENT
OF AMOUNT OWING AT THE END OF EACH YEAR OF ASSESSMENT
CAPITAL INCENTIVE !,,/7!.#%3 Conditions for annual allowance
Annual allowance
)NDUSTRIAL BUILDINGS OR IMPROVEMENTS
Asset type
#ONSTRUCTION OF BUILDINGS OR IMPROVEMENTS ON OR AFTER *ANUARY PROVIDED BUILDING IS USED WHOLLY OR MAINLY FOR CARRYING ON PROCESS OF MANUFACTURE OR SIMILAR PROCESS #ONSTRUCTION OF BUILDINGS OR IMPROVEMENTS ON OR AFTER *ULY TO 3EPTEMBER AND THE BUILDINGS OR THE IMPROVEMENTS ARE BROUGHT INTO USE BEFORE -ARCH AND USED IN A PROCESS OF MANUFACTURE OR SIMILAR PROCESS
OF COST PREVIOUSLY NOTE
.EW COMMERCIAL BUILDINGS OTHER THAN RESIDENTIAL ACCOMMODATION NOTE
!NY COST INCURRED IN ERECTING ANY NEW AND OF COST UNUSED BUILDING OR IMPROVING AN EXISTIING BUILDING ON OR AFTER !PRIL WHOLLY OR MAINLY USED FOR THE PURPOSES OF PRODUCING INCOME IN THE COURSE OF TRADE
"UILDING IN AN URBAN DEVELOPMENT ZONE NOTE
#OSTS INCURRED IN ERECTING OR EXTENDING A BUILDING IN RESPECT OF DEMOLISHING EXCAVATING THE LAND OR TO PROVIDE WATER POWER OR PARKING DRAINAGE OR SECURITY WASTE DISPOSAL OR ACCESS TO THE BUILDING )MPROVEMENTS TO EXISTING BUILDINGS
(OTEL BUILDINGS
#ONSTRUCTION OF BUILDINGS OR IMPROVEMENTS PROVIDED USED IN TRADE AS HOTELKEEPER OR USED by lessee in trade as hotelkeeper 2EFURBISHMENTS NOTE WHICH COMMENCED ON OR AFTER -ARCH
(OTEL EQUIPMENT
-ACHINERY IMPLEMENTS UTENSILS OR ARTICLES BROUGHT INTO USE ON OR AFTER $ECEMBER
OF COST
!IRCRAFT
!CQUIRED ON OR AFTER !PRIL
OF COST NOTE
&ARMING EQUIPMENT
-ACHINERY IMPLEMENTS UTENSILS OR ARTICLES OTHER THAN LIVESTOCK BROUGHT INTO USE ON OR AFTER *ULY "IODIESEL PLANT AND MACHINERY BROUGHT INTO USE AFTER !PRIL
IN lRST YEAR IN SECOND YEAR IN THIRD YEAR
3HIPS
3OUTH !FRICAN REGISTERED SHIPS USED FOR PROSPECTING MINING OR AS A FOREIGN GOING SHIP ACQUIRED ON OR AFTER !PRIL
OF COST NOTE
0LANT AND MACHINERY
.EW OR UNUSED MANUFACTURING ASSETS ACQUIRED ON OR AFTER -ARCH WILL BE SUBJECT TO WEAR AND TEAR ALLOWANCES OVER FOUR YEARS
IN ST YEAR IN EACH OF THE SUBSEQUENT YEARS (note 4)
0LANT AND MACHINERY SMALL BUSINESS CORPORATIONS ONLY
.EW AND UNUSED PLANT OR MACHINERY BROUGHT INTO OF COST USE ON OR AFTER !PRIL AND USED BY THE TAX PAYER DIRECTLY IN A PROCESS OF MANUFACTURE
.ON MANUFACTURING ASSETS SMALL BUSINESS CORPORATIONS ONLY
!CQUIRED ON OR AFTER !PRIL
IN lRST YEAR IN SECOND YEAR IN THIRD YEAR
,ICENCES
%XPENDITURE OTHER THAN FOR INFRASTRUCTURE TO ACQUIRE A LICENCE FROM A GOVERMENT BODY TO CARRY ON TELECOMMUNICATION SERVICES E XPLORATION PRODUCTION OR DISTRIBUTION OF PETROLEUM OR THE PROVISION OF GAMBLING FACILITIES
%VENLY OVER THE PERIOD OF THE LICENCE
SUBJECT TO A MAXIMUM OF YEARS
OF COST NOTE
IN lRST YEAR IN EACH OF THE SUBSEQUENT YEARS OF COST OF COST OF COST
Notes: !LLOWANCES AVAILABLE TO OWNERS AS USERS OF THE BUILDING OR AS LESSORS lNANCIERS 2EFURBISHMENT IS DElNED AS ANY WORK UNDERTAKEN WITHIN THE EXISTING BUILDING FRAMEWORK 2ECOUPMENTS OF ALLOWANCES CAN BE DEDUCTED FROM THE COST OF THE REPLACEMENT ASSET 7HERE PLANT AND MACHINERY IS USED IN A PROCESS OF MANUFACTURE OR A SIMILAR PROCESS THE TAXPAYER IS OBLIGED TO MAKE USE OF THE ALLOWANCES AND NOT THE WEAR AND TEAR RATES
WEAR AND TEAR
!,,/7!.#%3
4HE FOLLOWING RATES OF WEAR AND TEAR ARE ALLOWED BY 3!23 IN TERMS OF )NTERPRETATION .OTE Type of asset
No. of years for write-off
!DDING MACHINES !IR CONDITIONERS WINDOW MOBILE ROOM UNIT !IR CONDITIONING ASSETS ABSORPTION TYPE CHILLERS AIR HANDLING UNITS CENTRIFUGAL CHILLERS COOLING TOWERS CONDENSING SETS !IRCRAFT LIGHT PASSENGER OR COMMERCIAL HELICOPTERS !RC WELDING EQUIPMENT !RTEFACTS "ALERS "ATTERY CHARGERS "ICYCLES "OILERS "ULLDOZERS "UMPING mAKING #ARPORTS #ASH REGISTERS #ELL PHONE ANTENNAE #ELL PHONE MASTS #ELLULAR TELEPHONES #HEQUE WRITING MACHINES #INEMA EQUIPMENT #OLD DRINK DISPENSERS #OMMUNICATION SYSTEMS #OMPRESSORS #OMPUTERS MAINFRAME PERSONAL #OMPUTER SOFTWARE MAINFRAMES PURCHASED SELF DEVELOPED #OMPUTER SOFTWARE PERSONAL COMPUTERS #ONCRETE MIXERS PORTABLE #ONCRETE TRANSIT MIXERS #ONTAINERS #ROP SPRAYERS #URTAINS $EBARKING EQUIPMENT $ELIVERY VEHICLES $EMOUNTABLE PARTITIONS $ENTAL AND DOCTORS EQUIPMENT $ICTAPHONES $RILLING EQUIPMENT WATER
Type of asset
No. of years for write-off
$RILLS %LECTRIC SAWS %LECTROSTATIC COPIERS %NGRAVING EQUIPMENT %SCALATORS %XCAVATORS &AX MACHINES &ERTILISER SPREADERS &IRE ARMS &IRE EXTINGUISHERS LOOSE UNITS &IRE DETECTIONS SYSTEMS &ISHING VESSELS &ITTED CARPETS Food bins &OOD CONVEYING SYSTEMS &ORK LIFT TRUCKS &RONT END LOADERS &URNITURE AND lTTINGS 'ANTRY CRANES 'ARDEN IRRIGATION EQUIPMENT MOVABLE 'AS CUTTING EQUIPMENT 'AS HEATERS AND COOKERS 'EAR BOXES 'EAR SHAPERS 'ENERATORS PORTABLE 'ENERATORS STANDBY 'RADERS 'RINDING MACHINES 'UILLOTINES 'YMNASIUM EQUIPMENT #ARDIOVASCULAR (EALTH TESTING 7EIGHTS AND STRENGTH 3PINNING /THER (AIRDRESSERS EQUIPMENT (ARVESTERS (EAT DRYERS (EATING EQUIPMENT (OT WATER SYSTEMS )NCUBATORS )RONING AND PRESSING EQUIPMENT +ITCHEN EQUIPMENT +NITTING MACHINES ,ABORATORY RESEARCH EQUIPMENT ,ATHES ,AUNDROMAT EQUIPMENT ,AW REPORTS
4
Type of asset
No. of years for write-off
,IFT INSTALLATIONS -EDICAL THEATRE EQUIPMENT -ILLING MACHINES -OBILE CARAVANS -OBILE CRANES -OBILE REFRIGERATION UNITS Motors 4 -OTORCYCLES -OTORISED CHAIN SAWS -OTORISED CONCRETE MIXERS -OTOR MOWERS -USICAL INSTRUMENTS .AVIGATION SYSTEMS .EON SIGNS AND ADVERTISING BOARDS /FlCE EQUIPMENT ELECTRONIC /FlCE EQUIPMENT MECHANICAL /XYGEN CONCENTRATORS /VENS AND HEATING DEVICES /VENS FOR HEATING FOOD 0ACKAGING EQUIPMENT 0AINTINGS VALUABLE Pallets 4 0ASSENGER CARS 0ATTERNS TOOLING AND DIES 0ELLET MILLS 0ERFORATING EQUIPMENT 0HOTOCOPYING EQUIPMENT 0HOTOGRAPHIC EQUIPMENT 0LANERS 0LEASURE CRAFT ETC 0LOUGHS 0ORTABLE SAFES 0OWER TOOLS HAND OPERATED 0OWER SUPPLY 0UBLIC ADDRESS SYSTEMS 0UMPS 2ACEHORSES 2ADAR SYSTEMS 2ADIO COMMUNICATION 2EFRIGERATED MILK TANKERS 2EFRIGERATION EQUIPMENT 2EFRIGERATORS
Type of asset
No. of years for write-off
2UNWAY LIGHTS 3ANDERS 3CALES 3ECURITY SYSTEMS REMOVABLE 3EED SEPARATORS 3EWING MACHINES 3HAKERS 3HOP lTTINGS 3OLAR ENERGY UNITS 3PECIAL PATTERNS AND TOOLING 3PIN DRYERS 3POT WELDING EQUIPMENT 3TAFF TRAINING EQUIPMENT 3URGE BINS 3URVEYORS &IELD EQUIPMENT )NSTRUMENTS 4APE RECORDERS 4ELEPHONE EQUIPMENT 4ELEVISION AND ADVERTISING lLMS 4ELEVISION SETS VIDEO MACHINES AND DECODERS 4EXTBOOKS 4RACTORS 4RAILERS 4RAXCAVATORS 4ROLLIES 4RUCKS HEAVY DUTY 4RUCKS OTHER 4RUCK MOUNTED CRANES 4YPEWRITERS 6ENDING MACHINES INCLUDING VIDEO GAME MACHINES 6IDEO CASSETTES 7AREHOUSE RACKING 7ASHING MACHINES 7ATER DISTILLATION AND PURIlCATION PLANT 7ATER TANKERS 7ATER TANKS 7EIGHBRIDGES MOVABLE PARTS 7IRE LINE RODS 7ORKSHOP EQUIPMENT 8 RAY EQUIPMENT
Notes
EAR AND TEAR MAY BE CLAIMED ON EITHER A DIMINISHING VALUE METHOD OR ON A STRAIGHT 7 LINE BASIS IN WHICH CASE CERTAIN REQUIREMENTS APPLY 2EMOVAL COSTS INCURRED IN MOVING BUSINESS ASSETS FROM ONE LOCATION TO ANOTHER ARE NOT DEDUCTIBLE AS THESE ARE REGARDED AS BEING CAPITAL IN NATURE 7EAR AND TEAR MAY BE CLAIMED OVER THE REMAINING USEFUL LLIFE OF THE ASSETS 7HEN AN ASSET IS ACQUIRED FOR NO CONSIDERATION A WEAR AND TEAR DEDUCTION MAY BE CLAIMED ON ITS MARKET VALUE AT DATE OF ACQUISITION 7HERE AN ASSET IS ACQUIRED FROM A CONNECTED PERSON WEAR AND TEAR MAY ONLY BE CLAIMED ON THE ORIGINAL COST TO THE SELLER LESS ALLOWANCES CLAIMED BY THE CONNECTED PERSON PLUS RECOUPMENTS AND #'4 INCLUDED IN THE SELLER S INCOME 4HE ACQUISITION OF hSMALLv ITEMS AT A COST OF LESS THAN 2 2 PER ITEM MAY BE WRITTEN OFF IN FULL DURING THE YEAR OF ACQUISITION
STRATEGIC !,,/7!.#%3
Asset type
Conditions for annual allowance
3TRATEGIC PROJECTS NOTE
!N ADDITIONAL INDUSTRIAL INVESTMENT ALLOWANCE IS OF COST ALLOWED ON NEW AND UNUSED ASSETS USED FOR PRE FERRED QUALIFYING STRATEGIC PROJECTS WHICH WERE APPROVED BETWEEN *ULY AND *ULY !NY OTHER QUALIFYING STRATEGIC PROJECTS OF COST
Annual allowance
0IPELINES
.EW AND UNUSED STRUCTURES CONTRACTED FOR AND CONSTRUCTION COMMENCED ON OR AFTER &EBRUARY
OF COST
.EW AND UNUSED STRUCTURES CONTRACTED FOR AND CONSTRUCTION COMMENCED ON OR AFTER &EBRUARY
OF COST
!IRPORT HANGARS AND RUNWAYS
#ONSTRUCTION COMMENCED ON OR AFTER !PRIL
OF COST
2OLLING STOCK
"ROUGHT INTO USE ON OR AFTER *ANUARY
OF COST
0ORT ASSETS
"ROUGHT INTO USE FOR THE lRST TIME BY THE TAXPAYER ON OR AFTER *ANUARY
OF COST
!S FROM *ANUARY FOR NEW AND UNUSED ASSETS %NVIRONMENTAL TREATMENT AND RECYCLING ASSETS %NVIRONMENTAL WASTE DISPOSAL ASSETS OF A PERMANENT NATURE
IN ST YEAR IN EACH OF THE SUBSEQUENT YEARS OF COST
%LECTRICITY AND TELEPHONE TRANS MISSION LINES AND RAILWAY TRACKS
%NVIRONMENTAL ASSETS
%NERGY EFlCIENCY !LL FORMS OF ENERGY EFlCIENCY SAVINGS AS REmECTED $ETERMINED IN SAVINGS ON AN ENERGY SAVINGS CERTIlCATE IN ANY YEAR OF ACCORDANCE WITH A ASSESSMENT ENDING BEFORE *ANUARY FORMULA Note s 4HE ALLOWANCE IS LIMITED TO THE INCOME DERIVED FROM THE INDUSTRIAL PROJECT AND THE EXCESS IS DEDUCTIBLE IN THE IMMEDIATELY SUCCEEDING YEAR OF ASSESSMENT SUBJECT TO CERTAIN OTHER LIMITS
CAPITAL
'!).3 4!8
#APITAL 'AINS 4AX #'4 APPLICABLE SINCE /CTOBER APPLIES TO A RESIDENT S WORLDWIDE ASSETS AND TO A NON RESIDENT S IMMOVABLE PROPERTY OR ASSETS OF A PERMANENT ESTABLISHMENT IN THE 2EPUBLIC
Disposals #'4 IS TRIGGERED ON DISPOSAL OF AN ASSET UÊ « ÀÌ> ÌÊ` ë Ã> ÃÊ V Õ`i\ ABANDONMENT SCRAPPING LOSS ETC VESTING OF AN INTEREST IN AN ASSET OF A TRUST IN THE BENElCIARY DISTRIBUTION OF AN ASSET BY A COMPANY TO A SHAREHOLDER GRANTING RENEWAL EXTENSION OR EXCERCISE OF AN OPTION UÊ ii i`Ê` ë Ã> ÃÊ V Õ`i\ TERMINATION OF 3OUTH !FRICAN RESIDENCY A CHANGE IN THE USE OF ASSETS THE TRANSFER OF AN ASSET BY A PERMANENT ESTABLISHMENT THE REDUCTION OR WAIVER OF A DEBT BY A CREDITOR WITHOUT FULL CONSIDERATION SUBJECT TO CERTAIN EXCLUSIONS UÊ Ã« Ã> ÃÊiÝV Õ`i\ THE TRANSFER OF AN ASSET AS SECURITY FOR A DEBT OR THE RELEASE OF SUCH SECURITY ISSUE OF OR GRANT OF AN OPTION TO ACQUIRE A SHARE DEBENTURE OR unit trust LOANS AND THE TRANSFER OR RELEASE OF ASSET SECURING DEBT
Calculation of a Capital Gain/Loss s ! CAPITAL GAIN OR LOSS IS THE DIFFERENCE BETWEEN THE PROCEEDS AND THE BASE COST
Base Cost UÊ UÊ
Ý«i ` ÌÕÀiÊ V Õ`i`Ê ÊÌ iÊL>ÃiÊV ÃÌ\ COST OF ACQUISITION TRANSFER STAMP DUTY AND SIMILAR COSTS REMUNERATION OF ADVISORS CONSULTANTS AND AGENTS COSTS OF MOVING AN ASSET AND IMPROVEMENT COSTS Ý«i ` ÌÕÀiÊiÝV Õ`i`ÊvÀ ÊÌ iÊL>ÃiÊV ÃÌ\ EXPENSES DEDUCTIBLE FOR INCOME TAX PURPOSES INTEREST PAID RAISING FEES EXCEPT IN THE CASE OF LISTED SHARES AND business assets) EXPENSES INITIALLY RECORDED AND SUBSEQUENTLY RECOVERED UÊ iÌ `ÃÊv ÀÊ`iÌiÀ }ÊL>ÃiÊV ÃÌ\ 4IME APPORTIONMENT BASE COST Example: )F AN ASSET COST 2 ON /CTOBER AND WAS SOLD ON 3EPTEMBER FOR 2 AS #'4 WAS IMPLEMENTED ON /CTOBER THE BASE COST IS
/RIGINAL COST EXPENDITURE !DD
2 2
0ROCEEDS FROM DISPOSAL ,ESS "ASE COST EXPENDITURE
2 2
4IME APPORTIONMENT BASE COST
2
} X /4
Note 1: 7HEN DETERMINING THE NUMBER OF YEARS TO BE INCLUDED IN THE TIME APPORTIONMENT CALCULATION A PART OF THE YEAR IS TREATED AS A FULL YEAR Note 2: 7HERE EXPENDITURE IN RESPECT OF A PRE VALUATION DATE ASSET WAS INCURRED ON OR AFTER /CTOBER AND AN ALLOWANCE HAS BEEN ALLOWED IN RESPECT OF THAT ASSET A SECOND TIME APPORTIONMENT FORMULA IS APPLIED
6ALUATION AS AT /CTOBER OF THE PROCEEDS
Proceeds s s s
4HE TOTAL AMOUNT RECEIVED OR ACCRUED FROM THE DISPOSAL ÝV Õ`i`\ AMOUNTS INCLUDED IN GROSS INCOME FOR INCOME TAX PURPOSES AMOUNTS REPAID OR REPAYABLE OR A REDUCTION IN THE SALE PRICE -«iV wVÊÌÀ> Ã>VÌ Ã\ CONNECTED PERSONS DEEMED TO BE AT MARKET VALUE DECEASED PERSONS MARKET VALUE AS AT DATE OF DEATH DECEASED ESTATES THE DISPOSAL IS DEEMED TO BE AT THE BASE COST I E MARKET VALUE AT DATE OF DEATH
Inclusion Rates And Effective Rates Inclusion rate )NDIVIDUALS AND SPECIAL TRUSTS #OMPANIES 4RUSTS 5NIT 4RUSTS #)3 THE UNITHOLDER IS TAXABLE 2ETIREMENT &UNDS NOT TAXABLE
Max effective rate
Exclusions and Rebates s Annual exclusion .ATURAL PERSONS AND SPECIAL TRUSTS 2 2 .ATURAL PERSONS IN THE YEAR OF DEATH 2 2 s Exclusions s ! PRIMARY RESIDENCE OWNED BY A NATURAL PERSON OR A SPECIAL TRUST
USED FOR DOMESTIC RESIDENTIAL PURPOSES WHERE THE PROCEEDS DO NOT EXCEED 2 MILLLION 7HERE THE PROCEEDS EXCEED 2 MILLION THE EXCLUSION IS 2 MILLION 2 MILLION OF THE CALCULATED CAPITAL GAIN s 0ERSONAL USE ASSETS NOT USED FOR THE CARRYING ON OF A TRADE s ,UMP SUMS FROM INSURANCE AND RETIREMENT BENElTS 4HIS EXCLUSION DOES NOT APPLY TO SECOND HAND POLICIES s 3MALL BUSINESS ASSETS LIMITED TO 2 2 2EQUIREMENTS GROSS ASSET VALUE LESS THAN 2 MILLION SHOULD BE SOLE PROPRIETOR FOR AT LEAST lVE YEARS YEARS OLD
SUFFER FROM ILL HEALTH BE INlRM OR DECEASED s #OMPENSATION PRIZES AND DONATIONS TO CERTAIN 0"/ S s !SSETS USED BY REGISTERED MICRO BUSINESSES FOR BUSINESS PURPOSES Rollover Relief 'AIN IS DISREGARDED UNTIL THE DISPOSAL OF THE REPLACEMENT ASSET OR IS RECOGNISED OVER A lVE YEAR PERIOD COMMENCING WHEN THE REPLACEMENT ASSET IS BROUGHT INTO USE s #ERTAIN INVOLUNTARY DISPOSALS AND THE REPLACEMENT OF QUALIFYING business assets s 4RANSFER OF ASSETS BETWEEN SPOUSES s 3HAREBLOCK CONVERSIONS TO SECTIONAL TITLE s 4RANSFER OF PRIMARY RESIDENCE FROM A QUALIFYING CORPORATE ENTITY OR TRUST BETWEEN &EBRUARY AND $ECEMBER Corporate Transactions )NCOME TAX AND #'4 RELIEF EXISTS FOR CERTAIN TRANSACTIONS 4HESE ARE s !SSET FOR SHARE TRANSACTIONS s !MALGAMATION TRANSACTIONS s )NTRA GROUP TRANSACTIONS s 5NBUNDLING TRANSACTIONS s ,IQUIDATION WINDING UP OR DEREGISTRATION TRANSACTIONS WITHIN A GROUP Valuations 6ALUATIONS SHOULD HAVE BEEN OBTAINED ON OR BEFORE 3EPTEMBER &OR CERTAIN CATEGORIES OF ASSETS THESE VALUATIONS SHOULD HAVE BEEN LODGED WITH THE lRST TAX RETURN SUBMITTED AFTER 3EPTEMBER OR SUCH OTHER TIME AS THE #OMMISSIONER MAY ALLOW PROVIDED THE VALUATION WAS IN FACT DONE PRIOR TO THE REQUISITE DATE s 7HERE THE MARKET VALUE OF ANY INTANGIBLE ASSET EXCEEDS 2 MILLION s 7HERE THE MARKET VALUE OF ANY UNLISTED INVESTMENT EXCEEDS 2 MILLION s 7HERE THE MARKET VALUE OF ANY OTHER ASSET EXCEEDS 2 MILLION Non-resident Sellers of Immovable Property !S FROM 3EPTEMBER WHERE A NON RESIDENT DISPOSES OF IMMOVABLE PROPERTY IN 3OUTH !FRICA FOR 2 MILLION OR MORE THE PURCHASER WILL BE OBLIGED TO WITHHOLD THE FOLLOWING TAXES FROM THE PROCEEDS -i iÀ½ÃÊÃÌ>ÌÕà 7 Ì ` }ÊÌ>Ý .ATURAL PERSON #OMPANY 4RUST
LIMITATION
/& $%$5#4)/.3
%XPENDITURE PAID SHOULD BE APPORTIONED TO THE EXTENT THAT ONLY EXPENDITURE ACTUALLY INCURRED IN A YEAR OF ASSESSMENT IS DEDUCTIBLE 4HE REMAINDER OF THE PRE PAID EXPENDITURE WILL BE DEDUCTIBLE IN SUBSEQUENT YEARS OF ASSESSMENT 4HIS DOES NOT APPLY s WHERE THE GOODS SERVICES OR BENElTS IN RESPECT OF WHICH THE EXPENDITURE WAS INCURRED ARE SUPPLIED OR RENDERED WITHIN SIX MONTHS AFTER THE END OF THE YEAR OF ASSESSMENT s WHERE THE TOTAL PRE PAID EXPENDITURE DOES NOT EXCEED 2 2 s TO EXPENDITURE THE TIMING AND ACCRUAL OF WHICH IS SPECIlCALLY DETERMINED s TO PRE PAID EXPENDITURE PAYABLE IN TERMS OF A LEGISLATIVE OBLIGATION
RESEARCH
!.$ $%6%,/0-%.4
7HERE AN AMOUNT WAS INCURRED IN RESPECT OF QUALIFYING SCIENTIlC AND TECHNOLOGICAL RESEARCH AND DEVELOPMENT COSTS ON OR AFTER .OVEMBER THE FOLLOWING DEDUCTIONS WILL BE ALLOWED s OF OPERATING RESEARCH AND DEVELOPMENT COSTS IN RESPECT OF ACTIVITIES UNDERTAKEN IN 3OUTH !FRICA FOR THE PURPOSES OF THE DISCOVERY OF NOVEL
PRACTICAL AND NON OBVIOUS INFORMATION OR DEVISING DEVELOPING OR CREATING ANY INVENTION DESIGN OR COMPUTER PROGRAM AS DElNED IN THEIR APPLICABLE ACTS OR KNOWLEDGE ESSENTIAL TO THE USE OF SUCH RESEARCH PROPERTY s 2ESEARCH AND DEVELOPMENT CAPITAL COSTS INCLUDING THE COST OF ANY BUILDING OR PART THEREOF MACHINERY PLANT IMPLEMENTS UTENSIL OR ARTICLE OR IMPROVEMENTS THERETO OF A CAPITAL NATURE ON A BASIS
PATENT /
).4%,,%#45!, 02/0%249
! TAXPAYER MAY CLAIM AN ALLOWANCE FOR THE COST OF ACQUIRING ANY INVENTION
PATENT DESIGN COPYRIGHT OTHER PROPERTY WHICH IS OF A SIMILAR NATURE OR KNOWLEDGE CONNECTED WITH THE USE OF SUCH PATENT DESIGN COPYRIGHT OR OTHER PROPERTY OR THE RIGHT TO HAVE SUCH KNOWLEDGE IMPARTED 7HERE THE COST EXCEEDS 2 THE ALLOWANCE IS LIMITED TO s OF THE COST IN RESPECT OF ANY INVENTION PATENT COPYRIGHT OR OTHER PROPERTY OF A SIMILAR NATURE OR s OF THE COST OF ANY DESIGN OR OTHER PROPERTY OF A SIMILAR NATURE 7HERE THE INTANGIBLE WAS ACQUIRED FROM A CONNECTED PERSON THE ALLOWANCE IS LIMITED TO THE COST TO THE CONNECTED PERSON LESS ALLOWANCES CLAIMED BY THE CONNECTED PERSON PLUS RECOUPMENTS AND #'4 INCLUDED IN THE SELLER S INCOME No allowance IS ALLOWED IN RESPECT OF ANY EXPENDITURE INCURRED BY THE TAXPAYER ON OR AFTER /CTOBER IN RESPECT OF THE ACQUISITION OF ANY TRADEMARK OR PROPERTY OF A SIMILAR NATURE
REINVESTMENT 2%,)%& 4AXPAYERS CAN DEFER TAXABLE RECOUPMENTS AND CAPITAL GAINS ON THE SALE OF BUSINESS ASSETS EXCLUDING BUILDINGS IF THEY FULLY REINVEST THE SALE PROCEEDS IN OTHER QUALIFYING ASSETS WITHIN A PERIOD OF THREE YEARS 4AX ON THE RECOUPMENT AND CAPITAL GAIN UPON THE DISPOSAL OF THE OLD ASSET IS SPREAD OVER THE SAME PERIOD AS WEAR AND TEAR MAY BE CLAIMED FOR THE REPLACEMENT ASSET
RESIDENCE BASED
4!8!4)/.
!S FROM *ANUARY RESIDENTS OF 3OUTH !FRICA ARE TAXABLE ON THEIR WORLDWIDE INCOME
Resident means s s s
! NATURAL PERSON WHO IS ORDINARILY RESIDENT IN 3OUTH !FRICA OR !S FROM -ARCH A NATURAL PERSON WHO IS PHYSICALLY PRESENT IN 3OUTH !FRICA FOR AT LEAST DAYS IN THE CURRENT AND EACH OF THE PRECEDING lVE TAX YEARS AND AT LEAST DAYS DURING THE lVE PRECEDING TAX YEARS OR ! COMPANY OR TRUST THAT IS INCORPORATED ESTABLISHED FORMED OR WHICH HAS ITS PLACE OF EFFECTIVE MANAGEMENT IN 3OUTH !FRICA
Resident excludes s s
! NATURAL PERSON WHO WAS PREVIOUSLY REGARDED AS A DEEMED RESIDENT IF PHYSICALLY ABSENT FROM 3OUTH !FRICA FOR A CONTINUOUS PERIOD OF AT LEAST DAYS FROM THE DATE OF DEPARTURE ! PERSON WHO IS DEEMED TO BE EXCLUSIVELY A RESIDENT OF ANOTHER COUNTRY FOR THE PURPOSES OF THE APPLICATION OF ANY DOUBLE TAXATION AGREEMENT
Exemptions s s
2EMUNERATION FOR SERVICES RENDERED OUTSIDE 3OUTH !FRICA DURING THE TAX YEAR IF SUCH PERSON WAS OUTSIDE 3OUTH !FRICA FOR PERIODS IN AGGREGATE OF AT LEAST DAYS OF WHICH DAYS WERE CONTINUOUS .ON 3OUTH !FRICAN PENSION AND SOCIAL SECURITY PAYMENTS
Foreign Dividends &OREIGN DIVIDENDS RECEIVED FROM A NON RESIDENT COMPANY INCLUDING DEEMED DIVIDENDS ARE TAXABLE EXCEPT IF s 4HE SHAREHOLDER HOLDS AT LEAST OF THE EQUITY AND VOTING RIGHTS OF THE DISTRIBUTING COMPANY s 4HE DISTRIBUTING COMPANY IS A COMPANY LISTED ON A RECOGNISED EXCHANGE s 4HE DISTRIBUTING COMPANY IS A CONTROLLED FOREIGN COMPANY #&# AND THE DIVIDENDS DO NOT EXCEED AMOUNTS DEEMED TO BE THE RESIDENT SHAREHOLD ER S INCOME UNDER THE #&# RULES s $ECLARED FROM PROlTS ALREADY TAXED IN 3OUTH !FRICA )NTEREST IS DEDUCTIBLE WHERE IT IS INCURRED IN THE PRODUCTION OF FOREIGN DIVIDENDS TO THE EXTENT THAT THEY ARE INCLUDED IN GROSS INCOME %XCESS INTEREST PAID MAY BE CARRIED FORWARD TO THE NEXT TAX YEAR ! RESIDENT IS ENTITLED TO A CREDIT FOR ANY WITHHOLDING TAX PAID IN RESPECT OF A FOREIGN DIVIDEND THAT IS INCLUDED IN GROSS INCOME
Controlled Foreign Companies ! #&# IS A NON RESIDENT COMPANY IN WHICH RESIDENTS OWN OR CONTROL MORE THAN OF THE PARTICIPATION OR VOTING RIGHTS 7HERE A RESIDENT ALONE OR WITH CONNECTED PERSONS HOLDS AT LEAST BUT NOT MORE THAN OF THE PARTICIPATION RIGHTS THEY MAY ELECT THAT THE FOREIGN COMPANY IS DEEMED A #&#
s ! RESIDENT MUST INCLUDE IN HIS INCOME .ET INCOME OF #&# X 2ESIDENT S PARTICIPATION RIGHTS IN #&# s
4OTAL PARTICIPATION RIGHTS IN THE #&# 4HE NET INCOME OF A #&# SHOULD BE CALCULATED ACCORDING TO 3OUTH !FRICAN TAX PRINCIPLES )F THE CALCULATION RESULTS IN A LOSS THE DEDUCTIONS ARE LIMITED TO INCOME AND THE EXCESS IS CARRIED FORWARD
Exemptions s s s s
4HE NET INCOME INCLUDING CAPITAL GAINS OF THE #&# THAT IS DERIVED FROM AN ACTIVE BONA lDE FOREIGN BUSINESS ESTABLISHMENT SITUATED OUTSIDE 3OUTH !FRICA )NCOME OTHERWISE TAXED IN 3OUTH !FRICA AT NORMAL RATES &OREIGN DIVIDENDS RECEIVED BY THE #&# FROM ANOTHER #&# TO THE EXTENT THAT THE INCOME FROM WHICH THE DIVIDEND IS DECLARED HAS ALREADY BEEN INCLUDED IN THE RESIDENT S TAXABLE INCOME .ET INCOME ATTRIBUTABLE TO INTEREST ROYALTIES OR SIMILAR INCOME PAYABLE TO THE #&# BY OTHER FOREIGN COMPANIES FORMING PART OF THE SAME GROUP OF COMPANIES
Tax Rebates s s
7HERE A RESIDENT HAS TO INCLUDE IN HIS TAXABLE INCOME ANY FOREIGN SOURCED INCOME OR CAPITAL GAIN PROPORTIONATE AMOUNT OF THE NET INCOME OF A #&# FOREIGN DIVIDENDS OR OTHER AMOUNTS ATTRIBUTED IN TERMS OF THE )NCOME 4AX !CT A REBATE IN RESPECT OF ANY FOREIGN TAXES PAID OR PAYABLE IN RESPECT OF SUCH AMOUNT TO A FOREIGN GOVERNMENT IS ALLOWED 4HE REBATE IS LIMITED TO THE FOREIGN TAX PAYABLE AND MAY NOT EXCEED 4OTAL 3! NORMAL TAX X &OREIGN INCOME
4OTAL TAXABLE INCOME s )F THE NORMAL TAX PAYABLE ON THE FOREIGN INCOME EXCEEDS THE REBATE THE EXCESS MAY BE CARRIED FORWARD FOR A MAXIMUM OF SEVEN YEARS
General s s s s s
! LOSS INCURRED IN CARRYING ON A BUSINESS OUTSIDE 3OUTH !FRICA MAY NOT BE SET OFF AGAINST INCOME IN 3OUTH !FRICA 4HE AMOUNT OF FOREIGN TAX PAYABLE MUST BE TRANSLATED TO 3OUTH !FRICAN CURRENCY AT THE LAST DAY OF THE TAX YEAR BY APPLYING THE AVERAGE EXCHANGE RATE FOR THAT TAX YEAR &OREIGN INCOME IS CONVERTED TO 2ANDS BY APPLYING THE SPOT EXCHANGE RATE AT THE DATE THE INCOME ACCRUES .ATURAL PERSONS AND NON TRADING TRUSTS MAY ELECT TO APPLY THE AVERAGE EXCHANGE RATE FOR THAT TAX YEAR 7HERE FOREIGN INCOME MAY NOT BE REMITTED BECAUSE OF RESTRICTIONS IMPOSED BY THE SOURCE COUNTRY SUCH INCOME IS INCLUDED IN THE RESIDENT S GROSS INCOME IN THE TAX YEAR DURING WHICH THAT AMOUNT MAY BE REMITTED TO 3OUTH !FRICA 4AX WITHHELD IN A FOREIGN COUNTRY IN RESPECT OF 3OUTH !FRICAN SOURCED INCOME IS RECOGNISED AS A DEDUCTION AGAINST SUCH INCOME RATHER THAN AS A REBATE AGAINST 3OUTH !FRICAN TAX PAYABLE ON THAT INCOME
PRE–TRADING
%80%.$)452%
4HE DEDUCTION OF EXPENDITURE AND LOSSES INCURRED IN CONNECTION WITH BUT PRIOR TO THE COMMENCEMENT OF TRADE IS ALLOWED PROVIDED THE EXPENDITURE AND LOSSES INCLUDING SECTION * INTEREST COULD HAVE BEEN DEDUCTIBLE HAD THE TRADE COMMENCED (OWEVER SUCH EXPENDITURE AND LOSSES ARE RING FENCED IN THAT THEY CAN ONLY BE SET OFF AGAINST INCOME FROM THAT TRADE 4HE BALANCE IS CARRIED FORWARD AND CAN BE CLAIMED IN THE NEXT YEAR OF ASSESSMENT
PRE–PRODUCTION
).4%2%34
)NTEREST AND RELATED lNANCE CHARGES INCURRED ON ANY BORROWING FOR THE ACQUISITION INSTALLATION ERECTION OR CONSTRUCTION OF ANY MACHINERY PLANT BUILDING OR IMPROVEMENTS TO A BUILDING OR OTHER ASSETS INCLUDING LAND ARE DEDUCTIBLE WHEN THE ASSET IS BROUGHT INTO USE IN THE PRODUCTION OF INCOME
BURSARIES
!.$ 3#(/,!23()03
Bona fide SCHOLARSHIPS OR BURSARIES GRANTED TO ENABLE ANY PERSON TO STUDY AT A RECOGNISED EDUCATIONAL INSTITUTION ARE EXEMPT FROM FRINGE BENElT TAX 7HERE THE BENElT IS GRANTED TO AN EMPLOYEE THE EXEMPTION WILL NOT APPLY UNLESS THE EMPLOYEE AGREES TO REIMBURSE THE EMPLOYER IN THE EVENT THAT THE STUDIES ARE NOT COMPLETED 7HERE THE BENElCIARY IS A RELATIVE OF THE EMPLOYEE THE EXEMPTION WILL ONLY APPLY IF THE ANNUAL REMUNERATION OF THE EMPLOYEE IS LESS THAN 2 2 AND TO THE EXTENT THAT THE BURSARY DOES NOT EXCEED 2 2
BROAD BASED
%-0,/9%% %15)49
%MPLOYER COMPANIES MAY ISSUE QUALIFYING SHARES UP TO A LIMIT OF 2 2 PER EMPLOYEE IN THE CURRENT TAX YEAR AND IN THE IMMEDIATELY PRECEDING FOUR TWO TAX YEARS ! TAX DEDUCTION LIMITED TO A MAXIMUM OF 2 2 PER ANNUM PER EMPLOYEE WILL BE ALLOWED IN THE EMPLOYER S HANDS 0ROVIDED THE EMPLOYEE HOLDS ONTO THE SHARES FOR AT LEAST lVE YEARS THERE WILL BE NO TAX CONSEQUENCES FOR THE EMPLOYEE OTHER THAN #'4
RESTRAINT
/& 42!$%
Gross Income !NY AMOUNT RECEIVED BY OR ACCRUED TO ANY NATURAL PERSON LABOUR BROKER OR PERSONAL SERVICE PROVIDER FOR A RESTRAINT OF TRADE IMPOSED ON SUCH PERSON
SHOULD BE INCLUDED IN THE RECIPIENT S GROSS INCOME IN THE YEAR OF RECEIPT OR ACCRUAL
Deduction 7HERE AN AMOUNT WAS INCURRED IN RESPECT OF A RESTRAINT OF TRADE IMPOSED ON ANY PERSON THE DEDUCTION IN A YEAR OF ASSESSMENT IS LIMITED TO THE LESSER OF s THE AMOUNT APPORTIONED OVER THE PERIOD FOR WHICH THE RESTRAINT APPLIES OR s ONE THIRD OF THE AMOUNT INCURRED PER ANNUM .O DEDUCTION IS ALLOWED WHERE THE AMOUNT DID NOT CONSTITUTE INCOME IN THE HANDS OF THE RECIPIENT
TAXATION OF
&!2-).' ).#/-%
&ARMING INCOME IS SUBJECT TO THE PROVISIONS OF THE &IRST 3CHEDULE TO THE )NCOME 4AX !CT &ARMERS WHO ARE NATURAL PERSONS ARE ALSO ALLOWED TO AVERAGE THEIR FARMING INCOME IN DETERMINING THEIR TAX LIABILITY
Summary Of The First Schedule’s Main Paragraphs n n
6ALUATION OF LIVESTOCK AND PRODUCE %LECTION OF STANDARD VALUES 2ING FENCING OF LIVESTOCK ACQUISITIONS $ONATIONS AND IN SPECIE DIVIDENDS #APITAL DEVELOPMENT EXPENDITURE &ORCED SALES AND DROUGHT RELIEF PROVISIONS
n
0LANTATION FARMING 3UGAR CANE DESTROYED BY lRE 2ATING FORMULA FOR FARMERS WHO ARE NATURAL PERSONS %XPROPRIATION OF FARMING land
Rating Formula Applicable To Farmers "ECAUSE A FARMER S INCOME mUCTUATES FROM YEAR TO YEAR HE MAY ELECT TO BE TAXED IN ACCORDANCE WITH A RATING FORMULA 4HE FORMULA IS BASED ON THE AVERAGE TAXABLE FARMING INCOME IN THE CURRENT AND PRECEDING FOUR YEARS 3HOULD HE ELECT TO MAKE USE OF THIS FORMULA IT IS BINDING UPON HIM IN FUTURE YEARS AND HE IS NOT PERMITTED TO MAKE USE OF THE PROVISIONS RELATING TO GOVERNMENT LIVESTOCK REDUCTION SCHEMES RATING FORMULA FOR PLANTATION FARMERS AND PROVISIONS RELATING TO SUGAR CANE FARMERS &OR A FARMER COMMENCING FARMING OPERATIONS THE AVERAGE TAXABLE INCOME FROM FARMING IN THE lRST YEAR OF ASSESSMENT ENDING ON OR AFTER *ANUARY WILL BE TWO THIRDS OF THE TAXABLE INCOME FOR THAT PERIOD
Capital Development Expenditure (Paragraph 12) 4HE FOLLOWING ITEMS OF CAPITAL EXPENDITURE INCURRED DURING A YEAR OF ASSESSMENT ARE DEDUCTIBLE AGAINST FARMING INCOME s EXPENDITURE WHICH IS NOT RESTRICTED TO TAXABLE INCOME FROM FARMING ERADICATION OF NOXIOUS WEEDS AND INVASIVE ALIEN VEGETATION AND PREVENTION OF SOIL EROSION s EXPENDITURE WHICH IS RESTRICTED TO TAXABLE INCOME FROM FARMING DIPPING TANKS BUILDING OF ROADS AND BRIDGES FOR FARMING OPERATIONS DAMS IRRIGATION SCHEMES BOREHOLES PUMPING PLANTS AND FENCES ADDITIONS ERECTION OF EXTENSIONS AND IMPROVEMENTS TO FARM BUILDINGS NOT USED FOR DOMESTIC PURPOSES COSTS OF ESTABLISHING THE AREA FOR AND THE PLANTING OF TREES SHRUBS and perennial plants CARRYING OF ELECTRIC POWER FROM MAIN POWER LINES TO FARM MACHINERY AND EQUIPMENT 4HE EXCESS EXPENDITURE OVER TAXABLE INCOME FROM FARMING IS CARRIED FORWARD TO THE NEXT YEAR OF ASSESSMENT -ACHINERY IMPLEMENTS UTENSILS AND ARTICLES FOR FARMING PURPOSES ARE WRITTEN OFF OVER THREE YEARS ON A BASIS 4HIS DOES NOT APPLY TO MOTOR VEHICLES USED TO CONVEY PASSENGERS CARAVANS AIRCRAFT EXCLUDING CROP SPRAYING AIRCRAFT OR OFlCE FURNITURE AND EQUIPMENT .ORMAL WEAR AND TEAR MAY BE CLAIMED ON THESE ITEMS
Non-farming Income )NCOME FROM NON FARMING SOURCES SHOULD BE SHOWN SEPARATELY 4HE MOST COMMON EXAMPLES OF NON FARMING INCOME ARE s INTEREST RECEIVED s INCOME DERIVED BY A FARMER FROM CARRYING ON A TRADE OTHER THAN FARMING s ANNUITIES s RENTAL INCOME FROM FARMLAND
DOUBLE TAXATION AGREEMENTS !.$ 7)4((/,$).' 4!8%3 $OUBLE 4AXATION !GREEMENTS PROVIDE FOR RELIEF IN RESPECT OF ROYALTIES AND KNOW HOW WITHHOLDING TAXES
Royalties % Non-Treaty Countries
Royalties %
12
Treaty Countries !LGERIA !USTRALIA !USTRIA "ELARUS "ELGIUM "OTSWANA "RAZIL "ULGARIA #ANADA #ROATIA #YPRUS #ZECH 2EPUBLIC $ENMARK %GYPT %THIOPIA &INLAND &RANCE 'ERMANY 'HANA 'REECE 'RENADA (UNGARY )NDIA )NDONESIA )RAN )RELAND )SRAEL )TALY *APAN +OREA +UWAIT ,ESOTHO ,UXEMBOURG -ALAWI -ALAYSIA -ALTA
-AURITIUS -OZAMBIQUE .AMIBIA .ETHERLANDS .EW :EALAND .IGERIA .ORWAY /MAN 0AKISTAN 0EOPLES 2EPUBLIC OF #HINA 0OLAND 0ORTUGAL 2OMANIA 2USSIAN &EDERATION 2WANDA 3AUDI !RABIA 3EYCHELLES 3IERRA ,EONE 3INGAPORE 3LOVAK 2EPUBLIC 3PAIN 3WAZILAND 3WEDEN 3WITZERLAND 4AIWAN 4ANZANIA 4HAILAND 4UNISIA 4URKEY 5GANDA 5KRAINE 5NITED +INGDOM 53! :AMBIA :IMBABWE
0ART OF THE $4! WITH THE 5NITED +INGDOM
Notes )F THE ROYALTY IS SUBJECT TO TAX IN THE RECIPIENT S COUNTRY OF RESIDENCE THERE IS NO WITHHOLDING TAX
4HE ABOVE RATES ARE PROVIDED AS A GUIDE ONLY ! NUMBER OF THE ABOVE $4! S PROVIDE FOR ALTERNATIVE RATES INCLUDING ZERO TO BE APPLIED IN SPECIlC CIRCUMSTANCES 4O VIEW THE COMPLETE $OUBLE 4AX !GREEMENTS REFER TO WWW SARS GOV ZA
#URRENTLY 3OUTH !FRICA HAS NO WITHHOLDING TAX ON DIVIDENDS OR INTEREST ! NEW DIVIDEND WITHHOLDING TAX IS TO REPLACE 34# 4HE EFFECTIVE DATE OF THIS CHANGE HAS NOT YET BEEN ANNOUNCED
MARRIED
). #/--5.)49 /& 02/0%249
4AXPAYERS WHO ARE MARRIED IN COMMUNITY OF PROPERTY ARE TAXED ON HALF OF THEIR OWN INTEREST DIVIDEND RENTAL INCOME AND CAPITAL GAIN AND HALF OF THEIR SPOUSES INTEREST DIVIDEND RENTAL INCOME AND CAPITAL GAIN NO MATTER IN WHOSE NAME THE ASSET IS REGISTERED EXCEPT FOR ASSETS EXCLUDED FROM THE JOINT ESTATE !LL OTHER TAXABLE INCOME IS TAXED ONLY IN THE HANDS OF THE SPOUSE WHO RECEIVES THAT INCOME
VENTURE
#!0)4!, ).6%34-%.43
!S FROM *ULY A TAXPAYER WILL BE ENTITLED TO A DEDUCTION OF OF THE COST OF SHARES ISSUED BY A VENTURE CAPITAL COMPANY SUBJECT TO THE FOLLOWING LIMITATIONS s A NATURAL PERSON MAY DEDUCT 2 IN A YEAR OF ASSESSMENT AND A TOTAL OF 2 s A LISTED COMPANY AND ANY COMPANY HELD DIRECTLY OR INDIRECTLY BY THAT LISTED COMPANY CAN DEDUCT A MAXIMUM OF THE COST OF UP TO OF THE TOTAL EQUITY INTEREST IN THE VENTURE CAPITAL COMPANY s THE VENTURE CAPITAL COMPANY MUST BE APPROVED BY 3!23 AS A QUALIFYING COMPANY AND FULlL A NUMBER OF PRE CONDITIONS
LEARNERSHIP
!,,/7!.#%
%MPLOYERS ARE ALLOWED TO CLAIM LEARNERSHIP ALLOWANCES IN RESPECT OF REGISTERED LEARNERSHIPS OVER AND ABOVE THE NORMAL REMUNERATION DEDUCTION &OR YEARS OF ASSESSMENT ENDING ON OR AFTER *ANUARY s 7HERE AN EMPLOYER IS PARTY TO A LEARNERSHIP THE LEARNERSHIP ALLOWANCE CONSISTS OF TWO BASIC THRESHOLDS NAMELY A RECURRING ANNUAL COMMENCE MENT ALLOWANCE OF 2 AND A COMPLETION ALLOWANCE OF 2 FOR EACH YEAR OF THE LEARNERSHIP CLAIMABLE CUMULATIVELY AT THE END OF THE LEARNERSHIP s &OR LEARNERS WITH DISABILITIES THE RELEVANT ALLOWANCES ARE INCREASED TO 2 s ,EARNERSHIPS OF LESS THAN FULL MONTHS WILL BE ELIGIBLE FOR A PRO RATA AMOUNT OF THE COMMENCEMENT ALLOWANCE REGARDLESS OF THE REASON THAT THE LEARNERSHIP FALLS SHORT OF THE MONTH PERIOD )F A LEARNERSHIP FALLS OVER TWO YEARS OF ASSESSMENT THE COMMENCEMENT ALLOWANCE IS ALLOCATED PRO RATA BETWEEN BOTH YEARS BASED ON THE CALENDAR MONTHS APPLICABLE TO EACH YEAR BY MULTIPLYING THE COMMENCEMENT AMOUNT BY THE TOTAL CALENDAR MONTHS OF THE LEARNERSHIP OVER &OR YEARS OF ASSESSMENT ENDING BEFORE *ANUARY THE LEARNERSHIP ALLOWANCE REGIME WAS AS FOLLOWS s #OMMENCEMENT ALLOWANCE 4HE LESSER OF OF THE PRESCRIBED REMUNERATION OF THE LEARNER OR 2 FOR EXISTING EMPLOYEES 4HE LESSER OF THE PRESCRIBED REMUNERATION OF THE LEARNER OR 2 FOR NEW EMPLOYEES s #OMPLETION ALLOWANCE 4HE LESSER OF THE PRESCRIBED REMUNERATION OF THE LEARNER OR 2 s &OR DISABLED PERSONS EMPLOYED AS LEARNERS THE INITIAL ALLOWANCE IS EQUAL TO OF THE ANNUAL SALARY OF AN EXISTING LEARNER UP TO A MAXIMUM OF 2 AND FOR A NEWLY EMPLOYED LEARNER UP TO A MAXIMUM OF 2 4HE COMPLETION ALLOWANCE FOR A DISABLED LEARNER IS OF ANNUAL SALARY UP TO A MAXIMUM OF 2 s 3PECIAL PROVISIONS APPLIED TO MULTIPLE YEAR APPRENTICESHIP CONTRACTS
BOND / INSTALMENT SALE 2%0!9-%.43 4HE FOLLOWING TABLE REmECTS REPAYMENTS ON EVERY 2 BORROWED %XAMPLE ! BOND OF 2 AT OVER YEARS 2 • 2 X 2 A MONTH OVER A YEAR PERIOD
Mortgage Bonds Rate
10 Yrs 20 Yrs
Short Term Financing
25 Yrs 30 Yrs
36 Months
48 Months
60 Months
OFFICIAL ).4%2%34 2!4%3 !.$ 0%.!,4)%3 Type
Reason
Basis of charge
0ROVISIONAL TAX
ST AND ND PAYMENT LATE
PENALTY PLUS INTEREST CHARGED DAILY FROM DUE DATE TO DATE OF PAYMENT
0ROVISIONAL TAX
RD PAYMENT LATE
)NTEREST CHARGED DAILY FROM EFFECTIVE DATE TO EARLIER OF PAYMENT DATE OR ASSESSMENT DATE %FFECTIVE DATE IS SIX MONTHS AFTER YEAR END
EXCEPT IN THE CASE OF &EBRUARY YEAR ENDS
WHEN THE EFFECTIVE DATE IS 3EPTEMBER
0ROVISIONAL TAX
/VERPAYMENT
#REDITED DAILY FROM EFFECTIVE DATE TO DATE OF REFUND
!SSESSMENT
,ATE PAYMENT
)NTEREST CHARGED ON EACH COMPLETED MONTH FROM lRST DUE DATE TO DATE OF PAYMENT
,OAN TO EMPLOYEE
$EEMED FRINGE BENElT
/FlCIAL RATE FOR FRINGE BENElT LESS ACTUAL RATE X LOAN X ACTUAL MONTHS DIVIDED BY
6!4
,ATE PAYMENT
PENALTY PLUS INTEREST AT THE PRESCRIBED rate
6!4
2EFUND
#ALCULATED MONTHLY STARTING BUSINESS DAYS AFTER RECEIPT OF RETURN TO DATE OF PAYMENT 0ERIOD IS SUSPENDED WHEN VENDOR DENIES 3!23 ACCESS TO BOOKS IF REQUESTED
%MPLOYEES TAX
,ATE PAYMENT
PENALTY PLUS INTEREST CHARGED DAILY FROM DUE DATE TO DATE OF PAYMENT
3KILLS $EVELOPMENT ,EVY
,ATE PAYMENT
PENALTY PLUS INTEREST CHARGED DAILY FROM DUE DATE TO DATE OF PAYMENT
PRIME OVERDRAFT
2!4%3
Date of change
Rate %
Date of change
Rate %
$ECEMBER *ANUARY &EBRUARY -ARCH !PRIL *UNE *ULY !UGUST /CTOBER *ANUARY *UNE *ULY 3EPTEMBER *ANUARY -ARCH *UNE 3EPTEMBER *UNE !UGUST 3EPTEMBER
/CTOBER $ECEMBER !UGUST !PRIL *UNE !UGUST /CTOBER $ECEMBER *UNE !UGUST /CTOBER $ECEMBER !PRIL *UNE $ECEMBER &EBRUARY -ARCH -AY -AY !UGUST
4HE ABOVE DATES ARE APPLICABLE TO 3TANDARD "ANK "ANKS DO NOT ALWAYS ADJUST THEIR RATES ON THE SAME DAY
INTEREST RATES
#(!.'%3
!LL PAYMENTS TENDERED TO 3!23 ARE lRST SET OFF AGAINST PENALTIES THEN INTEREST AND lNALLY TAX Prescribed rate - Assessed and Provisional tax Date of change Rate % -AY *ULY !UGUST 3EPTEMBER OfямБcial rate - Fringe beneямБts Date of change Rate % -ARCH *UNE *ULY 3EPTEMBER Prescribed rate - Overpayments of tax )NTEREST ON OVERPAYMENT OF PROVISIONAL TAX IS ONLY PAID IF TAXABLE INCOME EXCEEDS 2 INDIVIDUALS AND TRUSTS 2 COMPANIES AND CLOSE CORPORATIONS OR THE REFUND EXCEEDS 2 REGARDLESS OF TAXABLE INCOME Date of change Rate % -AY *ULY !UGUST 3EPTEMBER Prescribed rate - Late payment and late refund of VAT Date of change Rate % 3EPTEMBER
TRANSFER
$549
On Immovable Property (on or after 1 March 2006) 4RANSFER DUTY IF PROPERTY IS PURCHASED BY NATURAL PERSONS Property value 2 2 2 2 2 AND ABOVE
Rates of tax ON THE VALUE ABOVE 2 2 PLUS ON THE VALUE ABOVE 2
4RANSFER DUTY IF PROPERTY IS PURCHASED BY COMPANIES CLOSE CORPORATIONS OR TRUSTS IS AT A mAT RATE OF ON FULL PURCHASE CONSIDERATION Notes s .O TRANSFER DUTY IS PAYABLE IF THE TRANSACTION IS SUBJECT TO 6!4 s 7HERE A REGISTERED VENDOR PURCHASES PROPERTY FROM A NON VENDOR THE 6!4 NOTIONAL INPUT TAX CREDIT IS LIMITED TO THE QUANTUM OF TRANSFER DUTY PAYABLE ! NOTIONAL INPUT TAX CREDIT IS ONLY CLAIMABLE TO THE EXTENT TO WHICH THE PURCHASE PRICE HAS BEEN PAID s #ERTAIN EXEMPTIONS APPLY TO CORPORATE RESTRUCTURING s 4HE ACQUISITION OF A CONTINGENT RIGHT IN A TRUST THAT HOLDS A RESIDENTIAL PROPERTY OR THE SHARES IN A COMPANY OR THE MEMBER S INTEREST IN A CLOSE CORPORATION WHICH OWNS RESIDENTIAL PROPERTY COMPRISING MORE THAN OF ITS #'4 ASSETS IS SUBJECT TO TRANSFER DUTY AT THE APPLICABLE RATE s ,IABILITIES OF THE ENTITY ARE TO BE DISREGARDED WHEN CALCULATING THE FAIR VALUE OF THE CONTINGENT RIGHT IN THE TRUST THE SHARES IN THE COMPANY OR THE MEMBER S INTEREST IN THE CLOSE CORPORATION s 2ESIDENTIAL PROPERTY INCLUDES DWELLINGS HOLIDAY HOMES APARTMENTS AND SIMILAR ABODES IMPROVED AND UNIMPROVED ZONED FOR RESIDENTIAL PURPOSES )T EXCLUDES A STRUCTURE OF lVE OR MORE UNITS RENTED BY lVE OR MORE UNCONNECTED PERSONS )T ALSO EXCLUDES lXED PROPERTY FORMING PART OF THE ENTERPRISE OF A 6!4 VENDOR s !NY PERSON WHO DOES OR OMITS TO DO ANYTHING WITH THE INTENT TO EVADE TRANSFER DUTY MAY BE CHARGED WITH ADDITIONAL DUTY UP TO TWICE THE AMOUNT OF DUTY PAYABLE 3UCH A PERSON IS GUILTY OF AN OFFENCE AND LIABLE ON CONVICTION TO A lNE OR IMPRISONMENT FOR A PERIOD NOT EXCEEDING MONTHS s .O TRANSFER DUTY IS PAYABLE IN RESPECT OF THE ACQUISITION BY A QUALIFYING NATURAL PERSON OF A PRIMARY RESIDENCE FROM A QUALIFYING CORPORATE ENTITY OR TRUST BETWEEN &EBRUARY AND $ECEMBER
NATIONAL CREDIT
!#4
4HE MAXIMUM LENDING RATES OF INTEREST ARE CALCULATED AS FOLLOWS -ORTGAGE AGREEMENTS #REDIT FACILITIES 5NSECURED CREDIT TRANSACTIONS 3HORT TERM CREDIT TRANSACTIONS /THER CREDIT AGREEMENTS )NCIDENTAL CREDIT AGREEMENTS
[ 2EPO RATE X ] PER YEAR [ 2EPO RATE X ] PER YEAR [ 2EPO RATE X ] PER YEAR PER MONTH [ 2EPO RATE X ] PER YEAR PER MONTH
4HE .ATIONAL #REDIT !CT DOES NOT APPLY TO LARGE AGREEMENTS AS DElNED OR TO CREDIT AGREEMENTS WHERE THE CONSUMER IS A JURISTIC PERSON WITH A TURNOVER ABOVE A DElNED THRESHOLD THE STATE OR AN ORGAN OF STATE OR WHERE THE LENDER IS THE 3OUTH !FRICAN 2ESERVE "ANK OR A FOREIGNER
STAMP $549 .O STAMP DUTY IS PAYABLE ON LEASES OF IMMOVABLE PROPERTY ENTERED INTO AFTER !PRIL
INDUSTRIAL POLICY
02/*%#43
!N ADDITIONAL INVESTMENT ALLOWANCE IN RESPECT OF APPROVED PROJECTS IS AVAIL ABLE TO BROWNlELD PROJECT EXPANSION OR UPGRADE OR GREENlELD PROJECTS IN RESPECT OF WHOLLY NEW AND UNUSED MANUFACTURING ITEMS 4HE ADDITIONAL INVESTMENT ALLOWANCE SUBJECT TO LIMITATIONS IS OF THE COST OF THE ASSETS OR IF NO PREFERRED STATUS 4HERE IS ALSO AN ADDITIONAL PROJECT RELATED TRAINING ALLOWANCE OF 2 PER EMPLOYEE LIMITED TO 2 MILLION OR 2 MILLION IF NO PREFERRED STATUS
SECURITIES
42!.3&%2 4!8
!S FROM *ULY THE STAMP DUTY ON THE TRANSFER OF UNLISTED SHARES AND THE UNCERTIlCATED SECURITIES TAX ON LISTED SHARES WAS ABOLISHED AND REPLACED WITH THE SECURITIES TRANSFER TAX AT A RATE OF OF THE CONSIDERATION
CLOSING PRICE OR MARKET VALUE WHICHEVER IS GREATER ON THE TRANSFER
CANCELLATION OR REDEMPTION OF ANY LISTED OR UNLISTED SHARE MEMBERS INTEREST IN A CLOSE CORPORATION OR CESSION OF A RIGHT TO RECEIVE DISTRIBUTIONS FROM A COMPANY OR CLOSE CORPORATION s /N LISTED SECURITIES THIS MUST BE PAID BY THE TH OF THE MONTH FOLLOWING THE MONTH DURING WHICH THE TRANSFER OCCURRED s /N UNLISTED SECURITIES THIS MUST BE PAID BY THE END OF THE SECOND MONTH FOLLOWING THE END OF THE MONTH DURING WHICH THE TRANSFER OCCURRED s )F NOT PAID IN FULL WITHIN THE PRESCRIBED PERIOD INTEREST WILL BE IMPOSED AT THE PRESCRIBED RATE AND A PENALTY WILL BE PAYABLE s $UTY OF IS PAYABLE ON THE CREATION OR INCREASE IN AUTHORISED SHARE CAPITAL IN TERMS OF THE #OMPANIES !CT
TURNOVER TAX
-)#2/ "53).%33%3
!S FROM -ARCH A SIMPLIlED TURNOVER BASED TAX SYSTEM WAS IMPLEMENTED FOR SMALL SOLE PROPRIETORS PARTNERSHIPS AND INCORPORATED BUSINESSES WITH A TURNOVER LESS THAN 2 MILLION PER YEAR 4HIS TURNOVER BASED PRESUMPTIVE TAX SYSTEM IS ELECTIVE !FTER JOINING THE SYSTEM QUALIFYING BUSINESSES ARE TO REMAIN IN THE SYSTEM FOR A MINIMUM OF THREE YEARS PROVIDED THEY REMAIN WITHIN THE MONETARY THRESHOLD /NCE A BUSINESS HAS ELECTED TO MIGRATE OUT OF THE SYSTEM IT WILL NOT BE ABLE TO MIGRATE BACK FOR A PERIOD OF THREE YEARS 0ERSONAL SERVICES RENDERED UNDER EMPLOYMENT LIKE CONDITIONS AND PROFESSIONAL SERVICES ARE excluded FROM THIS TAX SYSTEM
Turnover 2 2
Rates of tax .IL
2 2 OF THE AMOUNT OVER 2 2 2
2 OF THE AMOUNT OVER 2
2 2
2 OF THE AMOUNT OVER 2
2 2
2 OF THE AMOUNT OVER 2
DONATIONS 4!8 0AYABLE AT A RATE OF ON THE VALUE OF ANY PROPERTY DISPOSED OF GRATU ITOUSLY BY A 3OUTH !FRICAN RESIDENT NATURAL PERSON CORPORATE ENTITY OR TRUST EXCLUDING DONATIONS EXEMPT FROM THE TAX 4HE TAX IS PAYABLE WITHIN THREE MONTHS OF THE DONATION TAKING EFFECT
Exempt donations include: s s s s s s s s s s s
$ONATIONS BY NATURAL PERSONS UP TO 2 PER ANNUM AFTER -ARCH 2 $ONATIONS BY CORPORATE ENTITIES NOT CONSIDERED TO BE PUBLIC COMPANIES UP TO 2 PER ANNUM $ONATIONS BETWEEN SPOUSES NOT SEPARATED "ONA lDE MAINTENANCE PAYMENTS $ONATIONS TO 0UBLIC "ENElT /RGANISATIONS AND QUALIFYING TRADITIONAL COUNCILS AND COMMUNITIES $ONATIONS WHERE THE DONEE WILL NOT BENElT UNTIL THE DEATH OF THE DONOR $ONATIONS MADE BY COMPANIES WHICH ARE RECOGNISED AS PUBLIC COMPANIES FOR TAX PURPOSES $ONATIONS CANCELLED WITHIN SIX MONTHS OF THE EFFECTIVE DATE 0ROPERTY DISPOSED OF UNDER AND IN PURSUANCE OF ANY TRUST $ONATION OF PROPERTY OR A RIGHT IN PROPERTY SITUATED OUTSIDE 3OUTH !FRICA IF ACQUIRED BY THE DONOR BEFORE BECOMING RESIDENT IN 3OUTH !FRICA FOR THE lRST TIME OR BY INHERITANCE OR DONATION FROM A NON RESIDENT $ONATIONS BETWEEN COMPANIES FORMING PART OF THE SAME GROUP OF COMPANIES
ESTATE
$549
Rates of Estate Duty s 0ERSONS DECEASED PRIOR TO /CTOBER s 0ERSONS DECEASED ON OR AFTER /CTOBER Exemptions from Estate Duty include: s 0ERSONS DECEASED PRIOR TO -ARCH THE lRST 2 s 0ERSONS DECEASED ON OR AFTER -ARCH THE lRST 2 s 0ERSONS DECEASED ON OR AFTER -ARCH THE lRST 2 s !NY BEQUEST TO A SURVIVING SPOUSE OR A PUBLIC BENElT ORGANISATION s 7HERE A SURVIVING SPOUSE DIES ON OR AFTER *ANUARY THE UNUTILISED PORTION OF THE EXEMPTION OF THE lRST DECEASED SPOUSE MAY BE CARRIED FORWARD TO THE ESTATE OF THE SURVIVING SPOUSE
EXECUTORS 2%-5.%2!4)/. !N EXECUTOR IS ENTITLED TO THE FOLLOWING REMUNERATION s THE REMUNERATION lXED BY DECEASED IN THE WILL OR s ON GROSS ASSETS AND ON INCOME ACCRUED AND COLLECTED FROM date of death %XECUTORS REMUNERATION IS SUBJECT TO 6!4 WHERE THE EXECUTOR IS REGISTERED AS A VENDOR
VALUE-ADDED TAX
6!4
6!4 WAS INTRODUCED ON 3EPTEMBER AT AND INCREASED TO ON !PRIL 4HE 6!4 SYSTEM COMPRISES THREE TYPES OF SUPPLIES s Standard-rated supplies n SUPPLIES OF GOODS AND SERVICES SUBJECT TO THE 6!4 RATE IN FORCE AT THE TIME OF SUPPLY s Exempt supplies n SUPPLIES OF CERTAIN SERVICES NOT SUBJECT TO 6!4 6ENDORS MAKING EXEMPT SUPPLIES ARE NOT ENTITLED TO INPUT CREDITS s Zero-rated supplies n SUPPLIES OF CERTAIN GOODS OR SERVICES SUBJECT TO 6!4 AT ZERO PERCENT 4HE FOLLOWING ARE AMONGST OTHERS SPECIlCALLY ZERO RATED BROWN BREAD MAIZE MEAL SAMP MEALIE RICE DRIED MAIZE DRIED BEANS LENTILS PILCHARDS EXCLUDING PET FOOD OR SARDINES SUPPLIED IN TINS
MILK POWDER UNmAVOURED DAIRY POWDER BLEND RICE FRESH VEGETABLES EXCLUDING CANNED BOTTLED AND DEHYDRATED FRESH FRUIT VEGETABLE OIL USED FOR COOKING EXCLUDING OLIVE OIL MILK INCLUDING LONG LIFE MILK EXCLUDING CONDENSED mAVOURED SWEETENED AND EVAPORATED MILK CULTURED MILK
BROWN WHEATEN mOUR RAW EGGS POD VEGETABLES DIESEL PETROL AND ILLUMINATING PARAFlN %XPORT SALES AND SERVICES ARE ZERO RATED SUBJECT TO SPECIlC REQUIREMENTS 3UPPLIES FROM 3OUTH !FRICA TO AN )NDUSTRIAL $EVELOPMENT :ONE WILL BE TREATED AS EXPORTS 6!4 INPUT TAX CREDITS MAY IN GENERAL NOT BE CLAIMED IN RESPECT OF ENTERTAINMENT AND SEDAN AND DOUBLE CAB TYPE MOTOR VEHICLES !LL FEE BASED lNANCIAL SERVICES ARE SUBJECT TO 6!4 WITH THE EXCEPTION OF s PREMIUMS PAYABLE IN RESPECT OF LIFE POLICIES ISSUED IN TERMS OF THE )NSURANCE !CT AND CONTRIBUTIONS TO PENSION PROVIDENT RETIREMENT ANNUITY AND MEDICAL AID FUNDS AND s BUYING OR SELLING OF DERIVATIVES OR GRANTING OF AN OPTION
Registration Requirements !S FROM -ARCH A VENDOR IS REQUIRED TO REGISTER FOR 6!4 WHEN HIS TURN OVER IN A MONTH PERIOD IS LIKELY TO EXCEED 2 MILLION PREVIOUSLY 2 7HERE TURNOVER IS LESS THAN 2 MILLION BUT EXCEEDS 2 2 AND 2 IN THE CASE OF COMMERCIAL RENTAL ESTABLISHMENTS IN A MONTH PERIOD A VENDOR CAN REGISTER VOLUNTARILY !LL VENDORS THAT DEREGISTER FROM THE 6!4 SYSTEM IN LIGHT OF THE INCREASE IN THE 6!4 REGISTRATION THRESHOLD TO 2 MILLION WILL BE ALLOWED TO PAY THE EXIT 6!4 OVER A PERIOD OF SIX MONTHS ! REGISTERED MICRO BUSINESS MAY NOT BE REGISTERED FOR 6!4 7HERE TURNOVER IS LESS THAN 2 MILLION PREVIOUSLY 2 MILLION IN A MONTH PERIOD 6!4 RETURNS MAY BE RENDERED EVERY FOUR MONTHS 7HERE TURNOVER IS LESS THAN 2 MILLION IN A MONTH PERIOD 6!4 RETURNS MAY BE RENDERED EVERY TWO MONTHS 4URNOVER IN EXCESS OF 2 MILLION RESULTS IN 6!4 RETURNS HAVING TO BE RENDERED EVERY MONTH &ARMERS WITH A TURNOVER OF LESS THAN 2 MILLION PREVIOUSLY 2 MILLION MAY RENDER 6!4 RETURNS EVERY SIX MONTHS .ORMALLY A VENDOR ACCOUNTS FOR 6!4 ON AN INVOICE BASIS (OWEVER WHERE TURNOVER IN A MONTH PERIOD IS LIKELY TO BE LESS THAN 2 MILLION ONE CAN APPLY TO BE PLACED ON A PAYMENTS BASIS IF THE VENDOR IS A NATURAL PERSON OR AN UNINCORPORATED BODY OF PERSONS WHOSE MEMBERS ARE NATURAL PERSONS ! TAX INVOICE MUST REmECT THE PURCHASER S TRADE NAME AND 6!4 REGISTRATION NUMBER IF THE VALUE IS IN EXCESS OF 2
EXCHANGE CONTROL
2%'5,!4)/.3
Foreign Capital Allowance )NDIVIDUALS OLDER THAN YEARS IN GOOD STANDING WITH 3!23 CAN INVEST 2 MILLION 2 MILLION ABROAD )NCOME ACCRUING THEREON MAY ALSO BE RETAINED ABROAD
Single Discretionary Allowance )NDIVIDUALS OLDER THAN YEARS HAVE A SINGLE DISCRETIONARY ALLOWANCE OF 2 2 PER CALENDAR YEAR FOR THE PURPOSE OF MAINTENANCE GIFTS TRAVEL AND STUDY )NDIVIDUALS UNDER YEARS HAVE A TRAVEL ALLOWANCE OF 2 PER CALENDAR YEAR
Miscellaneous Transfers !GAINST THE PRODUCTION OF THE NECESSARY DOCUMENTS APPLICATION CAN BE MADE FOR THE REMITTANCE OF ALIMONY AND CHILD SUPPORT LEGAL FEES FEES FOR EXAMINATIONS HELD IN 3OUTH !FRICA WEDDING EXPENSES AND "AR OR "AT -ITZVAH CEREMONIES SEMINAR FEES SUBSCRIPTIONS SPORTING EVENTS
Medical/Dental Expenses Abroad .O LIMIT AGAINST ORIGINAL DOCUMENTARY EVIDENCE OF COST
Full-time Students 4RAVEL AND MAINTENANCE COSTS ARE INCLUDED IN THE SINGLE DISCRETIONARY ALLOWANCE 4UITION AND ACADEMIC FEES MAY BE PAID DIRECTLY TO THE INSTITUTION CONCERNED AGAINST ORIGINAL DOCUMENTARY EVIDENCE WITHOUT ANY LIMIT
Philatelic and Numismatic Imports .O LIMIT APPLICABLE EXCLUDING 3OUTH !FRICAN GOLD COINS MINTED FROM
Directors Fees .O LIMIT IS APPLICABLE TO DIRECTORS FEES PAID TO NON RESIDENTS INCLUDING EMIGRANTS !PPLICATIONS TO BE SUPPORTED BY A COPY OF THE DIRECTORS RESOLUTION CONlRMING THE AMOUNT PAID TOGETHER WITH PROOF OF NON RESIDENT STATUS
Guarantees .O LIMIT IS APPLICABLE TO GUARANTEES GIVEN BY NON RESIDENTS IN RESPECT OF lNANCIAL ASSISTANCE TO 3OUTH !FRICAN RESIDENTS WHO ARE NOT AFFECTED PERSONS
Emigrants 7HERE THE FOREIGN CAPITAL ALLOWANCE HAS NOT BEEN FULLY UTILISED A TOP UP IS PERMITTED UP TO s 2 MILLION 2 MILLION PER FAMILY UNIT s 2 MILLION 2 MILLION PER SINGLE EMIGRANT s 2 MILLION OVERALL INSURED VALUE PER FAMILY UNIT OR SINGLE EMIGRANT OF HOUSEHOLD AND PERSONAL AND OTHER EFFECTS )N ADDITION THE UNUTILISED PORTION OF THE SINGLE DISCRETIONARY ALLOWANCE MAY BE REMITTED
Inheritances .ON RESIDENT BENElCIARIES ARE ENTITLED TO TRANSFER THEIR INHERITANCE IRRESPECTIVE OF WHETHER THE DECEASED WAS RESIDENT OR NON RESIDENT IN 3OUTH !FRICA &ORMER 3OUTH !FRICAN RESIDENTS HAVE TO COMPLETE EMIGRATION FORMALITIES IN ORDER TO QUALIFY
Remittable Income 4HE INCOME EARNED BY AN EMIGRANT ON HIS BLOCKED ASSETS IS FREELY REMITTABLE ABROAD AFTER PROVIDING FOR INCOME TAX WHERE APPLICABLE
Blocked Assets !SSETS IN EXCESS OF THE SETTLING IN ALLOWANCE REMAIN BLOCKED AND FALL UNDER THE
CONTROL OF AN AUTHORISED DEALER TO BE RELEASED FOR PAYMENT OF AUTHORISED GIFTS AND LOCAL EXPENSES INCLUDING DONATIONS TO 3OUTH !FRICAN RESIDENTS WITHIN AN OVERALL LIMIT OF 2 PER ANNUM !PPLICATIONS TO EXPORT BLOCKED ASSETS ARE SUBJECT TO A EXIT LEVY
Local Visits by Emigrants 2 PER CALENDAR YEAR PER FAMILY UNIT FROM BLOCKED FUNDS AT A RATE OF 2 PER DAY FOR ADULTS AND 2 PER DAY PER CHILD UNDER YEARS $IRECT RETURN AIRmIGHTS MAY BE PAID LOCALLY FROM BLOCKED FUNDS
Restrictions on Local Financial Assistance 4HE RATIO RESTRICTION ON LOCAL lNANCIAL ASSISTANCE HAS BEEN ABOLISHED AND THERE IS NOW NO RESTRICTION ON THE AMOUNT THAT CAN BE BORROWED LOCALLY BY AFFECTED PERSONS AND NON RESIDENTS FOR USE IN RESPECT OF bona ямБde FOREIGN DIRECT INVESTMENTS ,OCAL lNANCIAL ASSISTANCE TO EMIGRANTS REMAINS SUBJECT TO THE RATIO WHERE THEIR RAND ASSETS ARE USED AS COLLATERAL .ON RESIDENT WHOLLY OWNED SUBSIDIARIES MAY BORROW LOCALLY UP TO OF TOTAL SHAREHOLDERS INVESTMENTS
Foreign Investment in South Africa .ON RESIDENTS ENJOY UNRESTRICTED RIGHTS TO INVEST IN GILTS AND SHARES LISTED ON THE 3TOCK %XCHANGE AND EXPORT THE PROCEEDS ON THE SALE THEREOF )NTEREST AND DIVIDENDS ARE ALSO FREELY REMITTABLE ,OANS BY NON RESIDENTS TO 3OUTH !FRICAN INDIVIDUALS ENTITIES REQUIRE PRIOR %XCHANGE #ONTROL APPROVAL
Outbound Investments 4HE LIMIT THAT CAN BE APPROVED BY !UTHORISED $EALERS IS 2 MILLION 2 MILLION %XCHANGE #ONTROL APPROVAL WILL HAVE TO BE OBTAINED FOR INVESTMENTS EXCEEDING THIS LLIMIT
TAXATION OF
./. 2%3)$%.43
Interest s s
!LL INTEREST RECEIVED BY OR ACCRUED TO NON RESIDENTS IS EXEMPT FROM TAX
PROVIDED THE INDIVIDUAL IS PHYSICALLY ABSENT FROM 3OUTH !FRICA FOR AT LEAST DAYS AND DID NOT CARRY ON BUSINESS IN 3OUTH !FRICA THROUGH A PERMANENT ESTABLISHMENT DURING THE YEAR OF ASSESSMENT !S FROM !PRIL ALL INTEREST RECEIVED BY OR ACCRUED TO ANY COMPANY MANAGED OR CONTROLLED OUTSIDE 3OUTH !FRICA IS EXEMPT FROM TAX UNLESS SUCH COMPANY CARRIES ON BUSINESS IN 3OUTH !FRICA I E BRANCHES OF FOREIGN COMPANIES
Dividends ! NEW DIVIDENDS TAX HAS BEEN INTRODUCED WITH AN EFFECTIVE DATE STILL TO BE ANNOUNCED 4HIS DIVIDENDS TAX WILL BE BORNE BY THE SHAREHOLDER AT A RATE OF SUBJECT TO ANY REDUCTION IN TERMS OF DOUBLE TAXATION AGREEMENTS
Royalties 3UBJECT TO THE DOUBLE TAXATION AGREEMENTS ROYALTIES PAID TO NON RESIDENTS ARE SUBJECT TO A lNAL WITHHOLDING TAX OF 2ESIDENTS REQUIRE 'OVERNMENT AND 3 ! 2ESERVE "ANK APPROVAL FOR ROYALTY PAYMENTS TO A NON RESIDENT
Other Income .ON RESIDENTS WILL CONTINUE TO BE TAXED ON 3OUTH !FRICAN SOURCE AND DEEMED SOURCE INCOME ONLY
Payment to Non-resident Entertainers ! WITHHOLDING TAX OF IS PAYABLE BY NON RESIDENT SPORTS PERSONS AND ENTERTAINERS ON INCOME EARNED IN 3OUTH !FRICA
RECOMMENDED GUIDELINE FOR THE 2%4%.4)/. /& $/#5-%.43 !.$ 2%#/2$3 Retention periods commence from the date of the last entry in the particular record
Companies
Retention )N TERMS OF 'OVERNMENT 'AZETTE DATED .OVEMBER period
#ERTIlCATE OF )NCORPORATION #ERTIlCATE OF #HANGE OF .AME -EMORANDUM AND !RTICLES OF !SSOCIATION #ERTIlCATE TO #OMMENCE "USINESS -INUTE BOOK #- AND #- AS WELL AS RESOLUTIONS PASSED AT GENERAL MEETINGS
)NDElNITE )NDElNITE )NDElNITE )NDElNITE
!NNUAL &INANCIAL 3TATEMENTS "OOKS OF ACCOUNT 3UPPORTING SCHEDULES TO BOOKS OF ACCOUNT AND ANCILLARY BOOKS OF ACCOUNT &IXED ASSET REGISTERS 0ROXY FORMS
YEARS YEARS
)NDElNITE
YEARS YEARS YEARS
Close Corporations &OUNDING 3TATEMENT #+ !MENDED &OUNDING 3TATEMENT #+ -INUTE BOOKS
)NDElNITE )NDElNITE )NDElNITE
YEARS YEARS YEARS YEARS
!NNUAL &INANCIAL 3TATEMENTS "OOKS OF ACCOUNT !CCOUNTING RECORDS INCLUDING SUPPORTING SCHEDULES &IXED ASSET REGISTERS
When a company or close corporation reproduces its records on microfilm, the original may be destroyed after a period of three years The microfilm copies must be retained indefinitely
Other Suggested Periods of Retention 7HERE RELEVANT STATUTORY OR LEGAL REQUIREMENTS HAVE BEEN TAKEN INTO ACCOUNT 2ECORDS OF TRUST MONIES
)NDElNITE
4AX RETURNS AND ASSESSMENTS AFTER DATE OF ASSESSMENT
YEARS
3TAFF PERSONNEL RECORDS AFTER EMPLOYMENT CEASED 3ALARY AND WAGE REGISTERS
YEARS YEARS
0AID CHEQUES AND BILLS OF EXCHANGE
YEARS
YEARS YEARS YEARS YEARS YEARS YEARS YEARS
)NVOICES n SALES AND PURCHASES "ANK STATEMENTS AND VOUCHERS 3TOCK SHEETS n LISTED COMPANY 3TOCK SHEETS n UNLISTED COMPANY 9EAR END WORKING PAPERS 6!4 RECORDS /THER VOUCHERS AND GENERAL CORRESPONDENCE
The above list is not comprehensive
Offices National
Western Cape (Cape Town) T: (021) 596 5400 F: (021) 595 1024/5
Free State (Bloemfontein) T: (051) 447 6094 F: (051) 447 3861 Gauteng (Centurion) T: (012) 682 8800 F: (012) 682 8801
KwaZulu-Natal (Durban) T: (031) 275 9300 F: (031) 207 3652
Northern Cape (Kimberley) T: (053) 832 5950 F: (053) 832 5949
Mpumalanga (Nelspruit) T: (013) 753 3838 F: (012) 682 8908
Limpopo (Polokwane) T: (015) 291 1358 F: (015) 291 4857
Eastern Cape (Port Elizabeth) T: (041) 374 6001 F: (041) 374 6002
North-West (Rustenburg) T: (014) 594 8260 F: (014) 594 8261 International London (UK)
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