Should business trips on the gautrain be included under code 3702 (reimbursive allowance)?
30 June 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: My client receives
a salary under code 3601. However his IRP5 for 2014 also has a reimbursive
travel amount under code 3702. The clients has provided us with the schedules
making up the claim. Some of the payments received within the 3702 code total
are for Gautrain trips. Are the Gautrain trip costs tax deductible?
The ITR12 only accommodates a reimbursive deduction for a
vehicle. How do we handle this situation? It will be most gratefully
appreciated of one of the tech’s could please help.
A: According to
the SARS guide code 3702 is to be used for "a reimbursement for business
kilometres exceeding 8 000 kilometres per tax year or at a rate exceeding the
prescribed rate per kilometre or the employee receives any other form of
compensation for travel.”
Section 8(1)(i)(aa) refers to "travelling on business, as
contemplated in paragraph (b)” and it is only paragraph (b)(i) that doesn’t
refer to a motor vehicle ((ii), (iii) and (iv)) or vehicle (in (iiiA)). Section 8(1)(b)(i) refers to "transport
expenses” which could well include Gautrain costs, but its purposes is then
only actually to deem travel between home and work to be private travel. SARS’s Interpretation Note 14 (which sets out
the current practice prevailing) only deals with motor vehicle costs.
We therefore submit that an allowance for Gautrain costs is
not a "travel allowance” as envisaged by section 8(1)(a) and that the codes
3701 or 3702 is not appropriate and must be reflected against another
The problem is that the employee will then not be able to
reduce the allowance on assessment.
It is not clear why the allowance was not dealt with in
terms of section 8(1)(a)(ii).
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