What to Do When Tax Is Not Cut and Dried
Do you have a complex transaction, and don’t know which way SARS will go? Ask them upfront! Many entities enter into complex transactions where the tax issues are not cut and dried, but the risk of SARS ruling against them is too great. The good news is that since October 2006, there has been a […]
When SARS Says ‘No’, They Must Tell You Why
Taxpayers have the right to obtain reasons for decisions by SARS. When I was about three years old, my mother admonished me not to play with matches, and like the precocious brat I was, I demanded to know “why”. Many a parent, faced with similar demands from their offspring, would be tempted to exert parental […]
Expenses must be intended to produce taxable income
To successfully deduct an expense, there must be a link to earning taxable income. Section 11(a) of the Income Tax Act, the so-called ‘general deduction formula’, seems to have produced more court cases than virtually any other Section of the Act. And each time, the courts tell us the same thing: In order for you […]
The Tax Treatment of Relocation Expenses
Transferring staff? There are tax implications for them … and for you! If your business has branches in different locations, one of the best ways of offering key staff opportunities for career growth is to allow them to relocate. Relocating an existing staff member who has come to know and understand your systems, procedures, and […]
Compensation for Losses: Which ‘Hole’ is Filled?
Many taxpayers assume that compensation for losses is of a capital nature. It depends… There are no hard and fast rules for determining whether a particular gain is of a capital or a revenue nature. Each case needs to be decided on its own facts. The distinction is important because of the lower effective rate […]
Beware of Tax-Related Scams
Over the past five years, the SAFPS has seen a steady increase in the number of tax-related scams. Improved efficiency To improve efficiency when it comes to processing tax returns, and to encourage individuals and businesses to file their tax returns timeously, SARS launched its eFiling service in 2000. This allows taxpayers to file their […]
Home office expenditure
Taxpayers who are salaried employees have limited deductions available to them. However, home office expenditure can be claimed as an income tax deduction, but the onus is on the taxpayer to prove that the expenses are in fact deductible. For employment to constitute a “trade” and to qualify to deduct home office expenditure, the […]