Technical FAQs: Febriuary 2013
21 February 2013
Posted by: Stiaan Klue
Q: Section 10(1)(o)(ii), will the remuneration earned during
the days while a person is on leave in the Republic not be taxable for purposes
of this section of the Act?
A: Only to the extent that the remuneration is attributable
to the number of vacation or sick leave days credited to the employee in
respect of and during the period of service outside South Africa.
Q: Can a director of a company claim the relief in terms of
Section 10(1)(o)(ii) of the Act?
A: A director receives "remuneration” as defined for
purposes of the Fourth Schedule to the Income Tax Act, therefore the provisions
of s 10(1)(0)(ii) may apply to the director, same as a normal employee.
Q: I am self employed, can I claim travelling expenses by way of the deemed cost method of calculation
– s 8 of the Act?
A: The deemed costs may only be claimed if an employer pays
an allowance to an employee. A self employed person must claim the expenses in
terms of section 11 of the Act (actual expenses).
Q: What triggers Donations Tax?
A: Any gratuitous disposal of property, including any
gratuitous waiver or renunciation of a right” – section 55(1) of the Income Tax
Q: Can I claim the input VAT on the excess of my insurance
claim, I did not receive a VAT invoice?
A: current general practise is that where the sum insured is
stated in the policy as VAT-inclusive, and the excess is calculated as a
percentage of the value of the claim, the excess payment would be deemed to
Q: Can I avoid registering as a VAT vendor if I split my
operations into different entities?
A: A person who operates several enterprises, or who
operates an enterprise in branches or divisions cannot avoid the liability to
register for VAT by considering the turnover of each branch or division
individually. In such cases, the turnover of all the
enterprises/divisions/branches must be added together to determine the total
value of the supplies. Only associations not for gain (including welfare
organisations) can apply to be excluded from this rule. Section 23 of the Act
relates to the business activities of the "enterprise” and not a
company/association/person in its own capacity.
Q: Could you please confirm that a PBO is not allowed to
claim the input tax deduction on the purchase of a minibus. (PBO’s do benefit
from other input tax deductions, but there is no such benefit on the purchase
of a minibus).
A: You are correct, 17(2)(c) of the Value Added Tax Act does
not make any distinction between a vendor who is welfare organisation and one
that is not. This means that the vendor, be it a welfare organisation or not,
will not be able to claim an input tax on a vehicle which falls within the
definition of a "motor car” – the Act simply does not allow for this.