2.     TAXABLE BENEFITS

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

(a)     any asset consisting of any goods, commodity, financial instrument or property of any nature (other than money) has been acquired by the employee from the employer or any associated institution in relation to the employer or from any person by arrangement with the employer, either for no consideration or for a consideration given by the employee which is less than the value of such asset, as determined under paragraph 5(2): Provided that the provisions of this subparagraph shall not apply in respect of –

(i)      any meal, refreshment, voucher, board, fuel, power or water with which the employee has been provided as contemplated in subparagraph (c) or (d);

 

(ii)     any marketable security acquired by the exercise by the employee, as contemplated in section 8A, of any right to acquire any marketable security;

 

(iii)    any qualifying equity share acquired by an employee as contemplated in section 8B; or

(iv)    any equity instrument contemplated in section 8C; or

(b)     the employee has been granted the right to use any asset (other than any residential accommodation or household goods supplied with such accommodation) for his or her private or domestic purposes either free of charge or for a consideration payable by the employee which is less than the value of such use, as determined under paragraph 6 in the case of an asset other than a motor vehicle or under paragraph 7 in the case of a motor vehicle; or

(c)     the employee has been provided with any meal or refreshment or voucher entitling him to any meal or refreshment (other than any board or meals referred to in item (d)), either free of charge or for a consideration less than the value of such meal, refreshment or voucher, as the case may be, as determined under paragraph 8(2); or

(d)     the employee has been provided with residential accommodation (whether furnished or unfurnished and with or without board, meals, fuel, power or water) either free of charge or for a rental consideration payable by the employee which is less than the rental value of such accommodation as determined under the applicable provisions of paragraph 9; or

(e)     any service (other than a service to which the provisions of subparagraph (j) or (k) or paragraph 9(4)(a) apply) has at the expense of the employer been rendered to the employee (whether by the employer or by some other person), where that service has been utilized by the employee for his or her private or domestic purposes and no consideration has been given by the employee to the employer in respect of that service or, if any consideration has been given, the amount thereof is less than the amount of the lowest fare referred to in item (a) of subparagraph (1) of paragraph 10, or the cost referred to in item (b) of that subparagraph, as the case may be; or

(f)      a debt (other than a debt for purposes of the payment by the employee of any consideration in respect of any qualifying equity share contemplated in section 8B to comply with the minimum requirements of the Companies Act or the payment of any securities transfer tax payable in respect of that share, or a debt in respect of which a subsidy is payable as contemplated in subparagraph (gA)) has been incurred by the employee, whether in favour of the employer or in favour of any other person by arrangement with the employer or any associated institution in relation to the employer, and either-

(i)      no interest is payable by the employee in respect of such debt; or

 

(ii)     interest is payable by the employee in respect thereof at a rate of lower than the official rate of interest; or

(g)     the employer has paid any subsidy in respect of the amount of interest or capital repayments payable by the employee in terms of any debt; or

(gA)   the employer has, in respect of any debt owed by the employee to any lender, paid to such lender any subsidy, being an amount which, together with any interest payable by the employee in respect of that debt, exceeds the amount of the interest which, if calculated at the official rate of interest, would have been payable in respect of that debt; or

(h)     the employer has, whether directly or indirectly, paid any debt owing by the employee to any third person (other than an amount in respect of which item (i) or (j) applies), without requiring the employee to reimburse the employer for the amount paid or the employer has released the employee from an obligation to pay any debt owing by the employee to the employer: Provided that where any debt owing by the employee to the employer has been extinguished by prescription the employer shall be deemed to have released the employee from his or her obligation to pay the amount of such debt if the employer could have recovered the debt owing or caused the running of the prescription to be interrupted, unless the employer’s failure to recover the debt owing or to cause the running of the prescription to be interrupted was not due to any intention of the employer to confer a benefit on the employee; or

[Subparagraph (h) amended by section 55 of Act 31 of 2005 and substituted by section 100 of Act 22 of 2012 and section 94 of Act 25 of 2015 effective on 8 January 2016]

(i)      the employer has during any period directly or indirectly, made any contribution or payment to any fund contemplated in paragraph (b) of the definition of ‘benefit fund’ in section 1 for the benefit of any employee or the dependants of any employee; or

(j)      the employer has, directly or indirectly, incurred any amount (other than a contribution or payment contemplated in item (i)) in respect of any medical, dental and similar services, hospital services, nursing services or medicines provided to the employee or his or her spouse, child, relative or dependant.

(k)     the employer has made any payment to any insurer under an insurance policy directly or indirectly for the benefit of the employee or his or her spouse, child, dependant or nominee : Provided that this paragraph shall not apply in respect of an insurance policy that relates to an event arising solely out of and in the course of employment of the employee;

[Subparagraph (k) added by section 102 of Act 24 of 2011, amended by section 100 of Act 22 of 2012, substituted by section 118(1)(b) of Act 31 of 2013 and amended by section 118(1)(c) of Act 31 of 2013 effective on 1 March 2016 – date of operation in section 118 of Act 31 of 2013 as substituted by section 130 of Act 43 of 2014 – and section 69 of Act 23 of 2018 effective on 1 March 2019, applies in respect of years of assessment commencing on or after that date]

(l)      the employer has made any contribution for the benefit of any employee to any pension fund or provident fund: Provided that this subparagraph shall not apply to the transfer of any surplus as contemplated in section 15E(1)(b), (d) and (e) of the Pension Funds Act.

[Subparagraph (l) added by section 118 of Act 31 of 2013 effective on 1 March 2016 (Date of operation in section 118 of Act 31 of 2013 as substituted by section 130 of Act 43 of 2014) and substituted by section 69 of Act 23 of 2018 effective on 1 March 2017, applies in respect of years of assessment commencing on or after that date]

(m)    the employer has made any contribution for the benefit of any employee to any bargaining council established under section 27 of the Labour Relations Act, 1995 (Act No. 66 of 1995), in respect of a scheme or fund as contemplated in section 28(1)(g) of that Act, other than any payment to a pension fund or provident fund as contemplated in subparagraph (l).

[Subparagraph (m) added by section 69 of Act 23 of 2018 effective on 1 March 2019, applies in respect of years of assessment commencing on or after that date]

 

2A.   For the purposes of paragraph 2, a partner is deemed to be an employee of the partnership.

[Paragraph (2A) inserted by section 66 of Act 15 of 2016 effective on 19 January 2017]