Print Page
News & Press: Technical & tax law questions

The deductibility of training expenses in terms of section 11(a) of the Income Tax Act

Thursday, 06 November 2014   (0 Comments)
Posted by: Author: SAIT Technical
Share |

Author: SAIT Technical

Q: A business wants to deduct training expenditure in terms of section 11(a) of the Income Tax Act. What proof is needed to justify that the training was in production of income and actually incurred?

The training still needs to be performed but was already paid for. My view is that as long as the training is in the production of income (closely related to business activities), the deduction of the training expense will be allowed if a valid invoice is kept as proof that the training occurred.

A: You state that the training was already paid for, but the still needs to be performed.  We assume that the section 23H limitation doesn’t apply.  

It is true that the taxpayer bears the burden of proving that an amount or item is deductible or may be set-off – refer to section 102(1)(b) of the Tax Administration Act.  A valid invoice would certainly be necessary to meet this burden and should provide detail of the expense.  The detail can also be provided by means of other documents.  

We agree that the deduction needs to qualify in terms of section 11(a) and not be prohibited by section 23(g).  We accept that you are happy that the expense is not of a capital nature.  The only other requirement then is that the expenditure must be actually incurred in the production of the income.  You correctly referred to the following passage from the judgment of Corbett JA in Commissioner for Inland Revenue v Standard Bank of South Africa Ltd 1985 (4) SA 485(A) at 500H-J:

'Generally, in deciding whether money outlayed by a taxpayer constitute expenditure incurred in the production of income (in terms of the general deduction formula) important and sometimes overriding factors are the purpose of the expenditure and what the expenditure actually effects; and in this regard the closeness of the connection between the expenditure and the income-earning operations must be assessed.'

As to how close this connection must be, the court in Port Elizabeth Electric Tramway Co v Commissioner for Inland Revenue 1936 CPD 241 explained that '…income is produced by the performance of a series of acts and attendant upon them are expenses. Such expenses are deductible expenses provided that they are so closely linked to such acts as to be regarded as part of the cost of performing them... The purpose of the act entailing expenditure must be looked to. If it is performed for the purpose of earning income, then the expenditure attendant upon it is deductible' (at 245). 

Both the above were quoted from the Warner Bros case.  

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.

  • Tax Practitioner Registration Requirements & FAQ's
  • Rate Our Service

    Membership Management Software Powered by YourMembership  ::  Legal