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Government grants received by a school: capital or revenue nature?

21 November 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

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 decision.


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.


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