3. DETERMINATION OF CASH EQUIVALENT OF VALUE OF TAXABLE BENEFIT

(1)     The cash equivalent of the value of a taxable benefit shall, for the purposes of paragraph (i) of the definition of “gross income” in section 1 of this Act, be determined in accordance with the provisions of this Schedule by the employer by whom the taxable benefit has been granted.

(2)     The Commissioner may, if no determination is made, or if such determination appears to him or her to be incorrect, re-determine such cash equivalent-

(a)     and issue the employer with a notice of the assessment in terms of section 96 of the Tax Administration Act for the unpaid amount of employees’ tax that is required to be deducted or withheld from such cash equivalent; or

[Item (a) substituted by section 15 of Act 16 of 2016]

(b)     upon the assessment of the liability for normal tax of the employee to whom such taxable benefit has been granted.

(3)     If the employee concerned is dissatisfied with any determination or proposed determination by his or her employer of the cash equivalent of the value of any taxable benefit included in the remuneration of the employee for employees’ tax purposes, the employee or the employer may refer the matter to the Commissioner and the Commissioner may, if it appears to him or her that the determination or proposed determination should be adjusted, issue a directive to the employer as to the manner in which such determination should be made and the employer shall be obliged to act upon such directive: Provided that nothing in this subparagraph contained shall be construed as preventing the Commissioner from making a re-determination of such cash equivalent under the provisions of subparagraph (2).

[Subparagraph (3) substituted by section 21 of Act 20 of 2022]

13.     PAYMENT OF EMPLOYEE’S DEBT OR RELEASE OF EMPLOYEE FROM OBLIGATION TO PAY A DEBT

 

(1)     The cash equivalent of the value of the taxable benefit derived by reason of the payment of any amount by an employer in the circumstances contemplated in paragraph 2(h) shall be an amount equal to such amount and the cash equivalent of the benefit to an employee by reason of his release from the obligation to pay an amount owing, as contemplated in the said paragraph, shall be an amount equal to the amount that was owing.

 

(2)     No value shall be placed under this paragraph on the value of any taxable benefit derived by reason of the fact that an employer has paid-

 

(a)     ………..

 

(b)     subscriptions due by his or her employee to a professional body, if membership of such body is a condition of the employee’s employment;

 

(bA)  insurance premiums indemnifying an employee solely against claims arising from negligent acts or omissions on the part of the employee in rendering services to the employer; or

 

(c)     any portion of the value of a benefit which is payable by a former member of a non-statutory force or service as defined in the Government Employees Pension Law, 1996 (Proclamation No. 21 of 1996), to the Government Employees’ Pension Fund as contemplated in Rule 10(6)(d) or (e) of the Rules of the Government Employees Pension Fund contained in Schedule 1 to that Proclamation.

 

(3)     Where –

 

(a)     in consideration for the grant by any employer (hereinafter referred to as the former employer) to an employee of any bursary, study loan or similar assistance, the employee assumed an obligation to render services to the former employer for an agreed period;

 

(b)     in consequence of the employee having terminated his services with the former employer before the expiry of the said period and having taken up employment with another employer (hereinafter referred to as the present employer), the employee thereupon became liable to pay an amount to the former employer;

 

(c)     such amount was paid to the former employer on the employee’s behalf by the present employer; and

 

(d)     the employee has in consideration for such payment by the present employer assumed an obligation to render services to the present employer for a period which is not shorter than the unexpired portion of the period during which he had been obliged to render services to the former employer,

 

no value shall be placed under this paragraph on the value of any taxable benefit derived by reason of the payment referred to in item (c).

 

14.     ………..

 

15.     .……….

4.     TAXABLE BENEFITS GRANTED BY ASSOCIATED INSTITUTIONS

 

Where any associated institution in relation to any employer has given any employee of that employer, by reason of the fact that the employee is in the employment of the employer, or as a benefit or advantage of such employment or as a reward for services rendered or to be rendered by the employee to the employer any benefit or advantage which, if such benefit or advantage had been given to the employee directly by the employer in the circumstances contemplated in paragraph 2, would have constituted a taxable benefit, such benefit or advantage shall for the purposes of this Schedule be deemed to be a taxable benefit granted by the employer to the employee and the cash equivalent of the value of such taxable benefit shall be determined accordingly.

16.     BENEFITS GRANTED TO RELATIVES OF EMPLOYEES AND OTHERS

 

(1)     For the purposes of this Schedule and of paragraph (i) of the definition of “gross income” in section 1 of this Act, an employee shall be deemed to have been granted a taxable benefit in respect of his employment with an employer if as a benefit or advantage of or by virtue of the employee’s employment with the employer or as a reward for services rendered or to be rendered by the employee –

 

(a)     the employer has granted a benefit or advantage (whether directly or indirectly) to a relative of the employee, other than a benefit or advantage in respect of which paragraph 10(2)(d) applies; or

 

(b)     anything is done by the employer under any agreement, transaction or arrangement so as to confer any benefit or advantage upon any person other than the employee (whether directly or indirectly),

 

and such benefit or advantage, if it had been granted directly by the employer to the employee, would have constituted a taxable benefit contemplated in paragraph 2.

 

(2)     The provisions of this Schedule shall apply in relation to the taxable benefit so deemed to have been granted as though the taxable benefit had in fact been granted to the employee.

6.     RIGHT OF USE OF ANY ASSET (OTHER THAN RESIDENTIAL ACCOMMODATION OR ANY MOTOR VEHICLE)

(1)     Where an employee has been granted the right to use any asset (other than residential accommodation or any motor vehicle) as contemplated in paragraph 2(b), the cash equivalent of the value of the taxable benefit shall be so much of the value of the private or domestic use of such asset (as determined under subparagraph (2) of this paragraph for the period of use) as exceeds any consideration given by the employee for the use of such asset during such period or any amount expended by the employee on the maintenance or repair of such asset.

(2)     The value to be placed on the private or domestic use of such asset shall be –

(a)     where the asset is held by the employer as the lessee under a lease or hiring agreement, the amount of the rental payable by the employer in respect of the period during which the employee has the use of the asset; or

(b)     where the asset is owned by the employer, an amount calculated for the period during which the employee has the use of the asset at the rate of 15 per cent per annum on the lesser of the cost of such asset to the employer or the market value thereof at the date of commencement of the period of use: Provided that where an employee is granted the sole right of the use of the asset for a period extending over the useful life of the asset or over a major portion thereof, the value to be placed on the private or domestic use of the asset shall be the cost thereof to the employer, and in such case the taxable benefit in respect of such use shall be deemed to have accrued to the employee on the date on which he was first granted the right of use of such asset.

(3)     For employees tax purposes an appropriate portion of the said cash equivalent shall be apportioned to each period during the year of assessment in respect of which any cash remuneration is paid or becomes payable by the employer to the employee.

(4)     No value shall be placed under this paragraph on the private or domestic use of an asset by an employee, if –

(a)     such use is incidental to the use of the asset for the purposes of the employer’s business or the asset is provided by the employer as an amenity to be enjoyed by the employee at his place of work or for recreational purposes at that place or a place of recreation provided by the employer for the use of his employees in general: Provided that this item shall not apply in respect of clothing;

[Proviso to subpara (a) added by section 68 of Act 17 of 2017 effective on 1 March 2018]

(b)     the asset consists of any equipment or machine which the employer concerned allows his employees in general to use from time to time for short periods and the value of the private or domestic use of the asset, as determined under subparagraph (2), as does not exceed an amount determined on a basis as set out in a public notice issued by the Commissioner;

[Item (b) amended by section 72 of Act 60 of 2008 and substituted by section 95 of Act 25 of 2015 effective on 8 January 2016]

(bA)  the asset consists of telephone or computer equipment which the employee uses mainly for the purposes of the employer’s business;

[Item (bA) amended by section 41(1) of Act 20 of 2021 effective on 1 March, 2022 and applicable in respect of years of assessment commencing on or after that date]

(c)     the asset consists of books, literature, recordings or works of art; or

[Item (c) amended by section 41(1) of Act 20 of 2021 effective on 1 March, 2022 and applicable in respect of years of assessment commencing on or after that date]

(d)     such use is granted by an employer to an employee for long service as defined in paragraph 5(4) to the extent that it does not exceed R5 000: Provided that the aggregate value of an amount determined under this paragraph together with amounts determined under paragraph (vii) of the proviso to paragraph (c) of the definition of “gross income” in section 1 and paragraphs 5(2)(b) and 10(2)(e) of the Seventh Schedule does not exceed R5 000.

[Item (d) added by section 41(1) of Act 20 of 2021 effective on 1 March, 2022 and applicable in respect of years of assessment commencing on or after that date]