18.     ANNUAL STATEMENTS BY EMPLOYERS

 

(1)     Every employer shall on the return referred to in paragraph 14 of the Fourth Schedule declare that all taxable benefits enjoyed by employees of such employer during the period in respect of which such return was furnished, are declared on the employees’ tax certificates delivered to such employees or on any other return as may be required by the Commissioner.

 

(2)     Every such return shall, in the case of a company, be certified as correct by a director of such company.

 

19.       ……….

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.

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.     .……….

11.     BENEFITS IN RESPECT OF INTEREST ON DEBT

[Heading of paragraph 11 substituted by section 98 of Act 25 of 2015 effective on 8 January 2016]

(1)     The cash equivalent of the value of the taxable benefit derived in consequence of the debt owed by an employee in the circumstances contemplated in paragraph 2(f) shall be the amount of interest that would have been payable on the amount owing in respect of the debt in respect of the year of assessment if the employee had been obliged to pay interest on such amount during such year at the official rate of interest, less the amount of interest (if any) actually incurred by the employee in respect of the debt in respect of such year.

[Subparagraph (1) amended by section 33 of Act 96 of 1985 and substituted by section 48 of Act 21 of 1995 and section 98 of Act 25 of 2015 effective on 8 January 2016]

(2)     For the purposes of this Act –

(a)     a portion of the said cash equivalent shall be deemed to have accrued to the employee –

(i)      where interest in respect of the debt in question becomes payable by the employee at regular intervals, on each date during the year of assessment on which interest becomes so payable for a portion of such year;

[Item (i) substituted by section 98 of Act 25 of 2015 effecive on 8 January 2016]

(ii)     where interest in respect of the debt in question becomes payable by the employee at irregular intervals or where interest on the loan is not payable by him or her, on the last day of each period during the year of assessment in respect of which any cash remuneration becomes payable by the employer to the employee; and

[Item (ii) substituted by section 98 of Act 25 of 2015 effective on 8 January 2016] 

(b)     the said portion shall be determined by calculating interest at the official rate of interest for the portion of the year referred to in subparagraph (2)(a)(i) or the period referred to in subparagraph (2)(a)(ii), as the case may be, and deducting therefrom so much of the amount of interest (if any) payable by him or her on the debt  as relates to the said portion of a year or the said period, as the case may be : Provided that where the official rate of interest has been altered with effect from any date, any cash equivalent which is under item (a) deemed to have accrued to the employee on any date falling before the date on which such interest rate was so altered shall be determined as though such rate of interest had not been so altered.

[Words preceding the proviso substituted by section 98 of Act 25 of 2015 effective on 8 January 2016]

(3)     A different method of calculation of the said cash equivalent or portions thereof may be employed if the Commissioner decides, on application by the taxpayer, that such method achieves substantially the same result as the methods provided in subparagraphs (1) and (2).

[Subparagraph (3) substituted by section 98 of Act 25 of 2015 effective on 8 January 2016]

(4)     No value shall be placed under this paragraph on the taxable benefit derived in consequence of –

(a)     a debt owed by any employee to his or her employer if such debt or the aggregate of such debts does not exceed the sum of R3 000 at any relevant time; or

[Item (a) amended by section 2 of Act 8 of 2007 and section 1 of Act 3 of 2008 and substituted by section 98 of Act 25 of 2015 effective on 8 January 2016]

(b)     the debt owed to any employer by an employee incurred for the purpose of enabling that employee to further his or her own studies;

[Item (b) substituted by section 98 of Act 25 of 2015 effective on 8 January 2016 and amended by section 70 of Act 23 of 2018 effective on 1 March 2019, applies in respect of years of assessment commencing on or after that date]

(c)     a debt owed to his or her employer in consequence of a loan by that employer to that employee as does not exceed the amount of R450 000 if-

(i)      the debt was assumed for the purposes of acquiring immovable property used for residential purposes by the employee;

[Sub-item (i) substituted by section 44 of Act 23 of 2020]

(ii)     the market value of the immovable property acquired does not exceed R450 000 in relation to the year of assessment during which the property is acquired;

(iii)    the remuneration proxy of the employee does not exceed R250 000 in relation to the year of assessment during which the loan is granted; and

(iv)    the employee is not a connected person in relation to the employer.

[Paragraph (c) added by section 70 of Act 23 of 2018 effective on 1 March 2019, applies in respect of years of assessment commencing on or after that date]

(5)     Where any amount, being the cash equivalent as determined under the provisions of this paragraph, of the value of a taxable benefit derived by any taxpayer in consequence of a debt owed by him or her, has been included in such taxpayer’s taxable income in any year of assessment, such amount shall for the purposes of section 11(a) of this Act be deemed to be interest actually incurred by him or her in that year of assessment in respect of the said debt where such amount, had it been actually incurred as interest, would have been incurred by the taxpayer in the production of his or her income.

[Subparagraph (5) substituted by section 98 of Act 25 of 2015 effective on 8 January 2016]

10.     FREE OR CHEAP SERVICES

(1)     The cash equivalent of the value of any taxable benefit derived from the rendering of a service to any employee as contemplated in paragraph 2(e) shall be –

(a)     in the case of any travel facility granted by any employer who is engaged in the business of conveying passengers for reward by sea or by air to enable any employee or any relative of such employee to travel to any destination outside the Republic for his or her private or domestic purposes, an amount equal to the lowest fare payable by a passenger utilising such facility (had he or she paid the full fare), less the amount of any consideration given by the employee or his or her relative in respect of such facility: Provided that for the purposes hereof a forward journey and a return journey shall be regarded as one journey; or

(b)     in the case of the rendering of any other service as contemplated in the said paragraph, the cost to the employer in rendering such service or having such service rendered, less the amount of any consideration given by the employee in respect of such service.

(2)     No value shall be placed under this paragraph on –

(a)     any travel facility granted by any employer who is engaged in the business of conveying passengers for reward by land, sea or air to enable any employee in his employment or such employee’s spouse or minor child to travel –

(i)      to any destination in the Republic or to travel overland to any destination outside the Republic; or

(ii)     to any destination outside the Republic if such travel was undertaken on a flight or voyage made in the ordinary course of the employer’s business and such employee, spouse or minor child was not permitted to make a firm advance reservation of the seat or berth occupied by him or her;

(b)     any transport service rendered by any employer to his employees in general for the conveyance of such employees from their homes to the place of their employment and vice versa;

(bA)  any communication service provided to an employee if the service is used mainly for the purposes of the employer’s business;

(c)     any services rendered by an employer to his employees at their place of work for the better performance of their duties or as a benefit to be enjoyed by them at that place or for recreational purposes at that place or a place of recreation provided by the employer for the use of his employees in general;

[Item (c) amended by section 42(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)     any travel facility granted by an employer to the spouse or any minor child of an employee if-

(i)      that employee is for the duration of the term of his or her employment stationed for purposes of the business of that employer at a specific place in the Republic further than 250 kilometers away from his or her usual place of residence in the Republic;

(ii)     that employee is required to spend more than 183 days during the relevant year of assessment at that specific place for purposes of the business of that employer; and

(iii)    that facility is granted in respect of travel between that employee’s usual place of residence in the Republic and that specific place where the employee is so stationed; or

[Item (d) deleted by section 36 of Act 30 of 2002, added by section 58 of Act 31 of 2005, substituted by section 69(1) of Act 35 of 2007 and amended by section 42(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]

(e)     any services 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 all 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 6(4)(d) of the Seventh Schedule does not exceed R5 000.

[Item (e) added by section 42(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]