Q: Do the government
subsidies received by a private school owned by a close corporation fall under
taxable income or capital income?
A: Any amount
received by or accrued to the person (close corporation) as a beneficiary of a
government grant will only be exempt from normal tax if that government grant
(as defined in section 12P) is listed in the Eleventh Schedule; or was
identified by the Minister by notice in the Gazette. We don’t have enough information to comment
on whether or not the "subsidies” that you refer to meets these
requirements. If not, it will not be
exempt from normal tax.
Disclaimer: Nothing in
this query and answer should be construed as constituting tax advice or a tax
opinion. An expert should be consulted for advice based on the facts and
circumstances of each transaction/case. Even though great care has been taken
to ensure the accuracy of the answer, SAIT do not accept any responsibility for
consequences of decisions taken based on this query and answer. It remains your
own responsibility to consult the relevant primary resources when taking a
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.