Claiming Foreign Tax Credits

Back in the day when I was still running my tax practice full-time, I was called upon by a client to assist with the tax and accounting treatment of taxes withheld by a foreign country from income earned in that country—in this particular case, Botswana. The client’s query centred on the following two issues: Claiming […]

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 […]

Tax and Retrenchment: A Potential Minefield

Retrenchment can be extremely taxing … in more ways than one! Being retrenched is a traumatic experience regardless of your place on the corporate totem pole. However, the stakes tend to be higher for more senior employees – not only in terms of the larger sums involved when it comes to separation packages, but also […]

SARS’ “Lie Detector” Tests

Are you fiddling your taxes?  Here’s how SARS can catch you… In the old South Africa, the favourite national pastimes were braaivleis, rugby, and cheating on your tax returns. This was made easier by the fact that the Receiver of Revenue of old operated in an environment where no two offices even talked to one […]

Understanding the Foreign Services Income Exemption: The Requirement for Service Rendering

Many articles have been written about the application of the foreign income exemption provided for under Section 10(1)(o)(ii) of the Income Tax Act. This section provides for an exemption from South African tax from specific employment income earned while rendering services outside South Africa. The section limits such income qualifying for the exemption to any […]

What to Do if You Owe SARS Money

Owing money to the South African Revenue Service (SARS) can be stressful, but don’t panic. By understanding your options and taking prompt action, you can resolve the issue and minimise the impact. This guide will equip you with the knowledge you need to navigate a tax debt situation. The importance of addressing tax debt Take […]

Travel Claims, but No Allowance?

For commission-earners and the self-employed, the rules are slightly different—but travel costs can be claimed. The mistake that I make when writing articles about travel allowances is that I tend to forget that not all of us are ‘wage slaves’.  Indeed, there are many taxpayers for whom the saying, “If a man will not work, […]

Taxing Employer-Paid Gratuities

It’s not only your retirement fund that may pay out when you decide to call it a day. Some time ago I wrote a series of articles dealing with the various payments that an employee might receive when leaving an employer. However, while those articles dealt mostly with what went wrong between the former employer […]

It’s bonus time – but oh, the tax!

Unfortunately, it seems that The Grinch now works for SARS! How did the Grinch steal Christmas? In the beloved children’s story written in 1957 by Theodor Geisel, better known as ‘Dr Seuss’, we are introduced to this grouchy, solitary creature, the Grinch, who tries to cancel Christmas by stealing Christmas gifts and decorations from the […]

Bribes, penalties, and fines: Don’t expect help from SARS

Deductions are disallowed under Section 23(o)—but it’s not quite cut and dried… The meeting went on longer than you expected, and now you’re rushing to get to your next appointment.  It’s a new client, and a successful deal will be lucrative both for your company and this month’s commission cheque.  But not five minutes after […]