Travel Allowance

Taxpayers who receive a travel allowance and have one or more of the following SARS source codes, 3701, 3702 and 3802 listed on their IRP5’s are reminded that SARS will not allow you to claim the cost of business travel against your travel allowance received without a logbook. A logbook should contain the following details:

  • Purchase price for vehicle;
  • Make and model;
  • Year model;
  • Vehicle registration number;
  • Odometer reading at the start of the tax year (1 March);
  • Odometer reading at the end of the tax year (28/29 February);
  • Travel information:
    • The date of travel;
    • The kilometers travelled; and
    • The business travel details (starting address, destination and the reason for the trip)

Taxpayers are also reminded to keep their logbooks for a period of at least five years as SARS may request information for past years.

Medical Aid – Keep Your Employer in the Loop

Where an employer makes contributions to a Medical Aid on behalf of an employee, and the employee’s number of dependents change, individuals are encouraged to keep their employers in the loop as this has a direct effect on the PAYE deducted on a monthly basis.

Section 18a Donations – What Supporting Documents Are Required

According to the Tax Act 58 of 1962, hereafter referred to as the Act, taxpayers may only deduct bona fide donations in cash made to a registered charity organisation also referred to as a section 18A approved organisation. Taxpayers will receive a section 18A receipt issued by the organisation which should be submitted to SARS as supporting documents upon the filing of their income tax return.

Taxpayer’s will however notice, when completing the return, that a reference number is required when claiming a deduction under section 18A, and where their donation certificate does not list this amount, it should be requested before being able to proceed.

Rental Property

Taxpayers who rent out a property should accurately track expenses incurred in the production of their rental income as these expenses are tax deductible and will ultimately decrease their tax due. SARS however requires proof of these expenses and taxpayers are therefore reminded to keep the relevant supporting tax invoices or receipts.

Typical claimable expenses are water and electricity, interest on bond and other finance charges whereas bond payments and improvement costs are not tax deductible.

Contributions Towards a Retirement Annuity

As contributions to a Retirement Annuity may be deducted from a taxpayer’s taxable income, a tax certificate should be obtained from the relevant financial institution and not the benefit statement related to the fund.

Minors Who Earn Income

A minor child is liable for tax on income earned or received by him/her and should accordingly submit income tax returns to SARS on an annual basis. Such income would for example be salary or investment income. The minor child’s legal guardian is responsible for the registration and tax submission on behalf of the child.

It is important to note that all investment income received by a minor child must be declared.

Income Earned Abroad by South African Residents

As South Africa applies a residency based system of taxation, world -wide receipts derived by residents are defined as gross income. Residents are accordingly taxed on a residence-based system of tax.

Should a South African resident earn income from abroad, this income should be declared to SARS by way of your income tax return and he/she might be liable for tax on such income, depending on certain circumstances.

Non-Residents Working & Staying In South Africa

Since non-residents are taxed on a source-based system of tax, only receipts derived from sources within or deemed to be within South Africa are subject to tax in South Africa, with certain exemptions. Therefore if you are a non-resident earning income from a South African source, you should register for South African income tax and submit annual income tax returns to SARS.