12B.     INCURRAL OF COSTS RELATING TO MEDICAL SERVICES

(1)     The cash equivalent of the value of the taxable benefit contemplated in paragraph 2(j) is the amount incurred by the employer during any month, directly or indirectly, in respect of any medical, denial and similar services, hospital services, nursing services or medicines in respect of that employee, his or her spouse, child or other relative or dependants.

(2)     Where the payment of any amount contemplated in subparagraph (1) is made in such a manner that an appropriate portion thereof cannot be attributed to the relevant employee and his or her spouse, children, relatives and dependants, the amount of that payment in relation to that employee and his or her spouse, children, relatives and dependants is for purposes of subparagraph (1), deemed to be an amount equal to the total amount incurred by the employer during the relevant period in respect of all medical, dental and similar services, hospital services, nursing services or medicines for the benefit of all employees and their spouses, children, relatives and dependants divided by the number of employees who are entitled to make use of those services.

(3)     No value must be placed in terms of this paragraph on any taxable benefit –

(a)     resulting from the provision of medical treatment listed in any category of the prescribed minimum benefits determined by the Minister of Health in terms of section 67(1)(g) of the Medical Schemes Act which is provided to the employee or his or her spouse or children in terms of a scheme or programme of that employer –

(i)      which constitutes the carrying on of the business of a medical scheme if that scheme or programme has been approved by the Registrar of Medical Schemes as being exempt from complying with the requirements of medical schemes in terms of that Act; or

(ii)     which does not constitute the carrying on of the business of a medical scheme, if that employee and his or her spouse and children –

(aa)    are not beneficiaries of a medical scheme registered under the Medical Schemes Act; or

(bb)   are beneficiaries of such a medical scheme, and the total cost of that treatment is recovered from that medical scheme;

(aA)   where the services are rendered or the medicines are supplied for purposes of complying with any law of the Republic;

(b)     derived from an employer by –

(i)      a person who by reason of superannuation, ill-health or other infirmity retired from the employ of that employer;

(ii)     the dependants of a person after that person’s death, if that person was in the employ of that employer on the date of death;

(iii)    the dependants of a person after that person’s death, if that person retired from the employ of that employer by reason of superannuation, ill-health or other infirmity; or

(iv)    a person who during the relevant year of assessment is entitled to a rebate under section 6(2)(b); or

(c)     where the services are rendered by the employer to its employees in general at their place of work for the better performance of their duties.