Why employers should be careful when using ETI schemes

In a Binding Private Ruling issued on 6 July 2021, SARS has made strict ruling on an Employment Tax Incentive Act (ETI) scheme that has been doing the rounds. It is not often that negative rulings get published and it is therefore a unique situation that should serve as a warning to those participating in […]

THE TAXATION OF EMPLOYEE INCENTIVE SCHEMES

It has become popular commercial practice for many employers to design employment incentive schemes whereby employees are remunerated for services rendered over a period of time by allowing them to participate in share incentive schemes. Typically, these schemes take the form of either cash-based settled schemes or share-based settled schemes. The former involves participating employees […]

Donations tax

Donations tax is levied in terms of the Income Tax Act at 20% of the value of any property donated by South African tax residents. The tax is levied on the donor, although the Act does make provision for the tax to also be recovered from the person receiving the donation in certain instances if […]

Provisions and liabilities: Do you know the difference?

Provisions and liabilities – words that are often used interchangeably but for accounting purposes they are not the same. To determine whether expenditure is a provision or a liability depends on the certainty, timing and amount of the expenditure. The classification of provisions and liabilities depends on the answers to the questions as set out […]

Public benefit organisations: Profit from tax benefits

Organisations with philanthropic missions serving the general public may enjoy the benefit of SARS’ generosity if they have all their ducks in a row. There are, however, quite a number of requirements and stipulations which must be adhered to in order to qualify, and companies that want to apply, should ensure that they keep to […]