|RENDERING OF RETURN
Your return must be rendered by 5
Where you are authorised to close your accounts on a date other than 28/29 February,
your return must be submitted within 60 days of such authorised date.
If you are unable to render the return within the prescribed period, you must apply for
an extension in writing to the Receiver of Revenue to whom you render your return.
If you have already rendered a return for this year, return this form stating your
income tax reference number and the Revenue Office to which you sent the previous return.
If there is insufficient space for any item on the return, a separate statement giving
the required details must be attached to your return.
IF YOU HAVE RECEIVED A RETURN, IT MUST BE COMPLETED AND RENDERED IRRESPECTIVE
OF WHETHER OR NOT YOUR NET REMUNERATION EXCEEDED R60 000 PER ANNUM.
DO NOT INCLUDE ANY PAYMENTS OR CORRESPONDENCE WITH YOUR RETURN.
How to complete your return
PARAGRAPH NUMBERS OF THIS BROCHURE CORRESPOND WITH THOSE OF THE RETURN.
FILL IN THE WHITE AREAS ONLY WHERE PARTICULARS HAVE CHANGED OR HAVE NOT BEEN
PRINTED IN THE SHADED AREAS.
1.13 Furnish your PAYE reference number if you are registered for employees tax
1.14 Furnish your VAT registration number if you are registered for purposes of VAT.
1.15 These particulars must be furnished to enable any possible refund to be paid directly
into your bank account, thereby preventing the possibility of a cheque being stolen or
cashed unlawfully. It is essential th at you immediately inform your local Receiver of
Revenue (in writing) of any changes in the particulars. The assessment notice will
indicate whether your account has been credited or a cheque has been issued to you.
1.17 THE RETURN MUST BE SIGNED BY YOU.
1.18 Since many taxpayers make use of the services of accountants, bookkeepers and tax
consultants and, therefore, do not use this brochure, this question must be answered in
order to reduce printing and distribution costs.
Liability for provisional tax
A person who derives income from sources other than remuneration (e.g. business,
farming, interest and rent) and whose taxable income from such sources exceeds R1 000 per
year, is regarded as a provisional taxpayer. A person (excluding a director of a
private company or a person who carries on any business) who is over 65 years of age and
income for the year does not exceed R50 000 need not, under certain circumstances,
register as a provisional taxpayer.
All income/benefits, in cash or otherwise, received by or accrued to you or your minor
children (see paragraph2.4.4) during the tax year must be declared in your return. Amounts
received from any employer in the Republic during your temporary
absence from the Republic, must be declared.
Marriages in community of property
The taxable income of a spouse married in community of property will, in the case of:
Income received or accrued from carrying on any trade (excluding the letting of fixed
property), be deemed to be the income of the spouse who is carrying on the trade. Where
the spouses are trading in partnership, the income will, subject to the anti-avoidance
provisions (see paragraph 11.7 on page 13), accrue in the agreed profit-sharing ratio. Any
benefit paid by a pension, provident, benefit or retirement annuity fund is deemed to be
trade income and will be taxed in the hands of the member or past member of the fund. Any
annuity received as a result of a purchased annuity, as defined in section 10A of the
Income Tax Act, is also deemed to be trade income and will be taxed in the hands of the
person to whom the annuity is payable. Income received or accrued otherwise than from the
carrying on of any trade, (e.g. interest), including rental from the letting of fixed
property, in respect of assets forming part of the communal estate, is deemed to accrue to
the spouses in equal portions. Where the income doesnt accrue to the communal
estate, it will be included in the income of the spouse who owns the asset (this income
must be clearly identified).
Where any spouses income is deemed to be the income of the other spouse (e.g.
rental), any deductions or allowances relating to that income will be allowed in the same
proportion in which the income is taxed. The total investment income received by both
spouses must be delivered in both the husbands and the wifes return of income.
provides for a split to be made.
Marriages out of community of property
Income is taxed in the hands of the spouse to whom such income accrues.
2.1 and 2.2 REMUNERATION, SERVICE BENEFITS AND
Examples of income/benefits which must be included in your return: Receipts and
accruals for services rendered/to be rendered. *Clothing *Directors fees
*Service and fringe benefits *Gratuities *Commission *Overtime
*Wages and salaries *Allowances *Options/rights to purchase shares, etc. *Bonuses
All IRP5 and IT3(a) certificates must be attached to page 7 of your return.
A pension must be declared as taxable income if the services in respect thereof were
rendered in the Republic for at least two out of the ten years immediately preceding the
date on which the pension became payable for the first time. If the pension was awarded
for services rendered within and outside the Republic only that portion of your pension in
respect of services
rendered in the Republic will be from a source in, and subject to tax in the Republic. If
you are entitled to such an apportionment, furnish particulars of your periods of service
in the Republic as well as the total period of service in respect of which the pension is
paid. Pensions awarded by the Government, Transnet, Provincial administrations and local
authorities, are taxable in full, except where a double taxation avoidance agreement
provides otherwise. Pensions paid in terms of the Workmens Compensation Act must
The following pensions are exempt from tax:
*War veterans pensions.
*Compensation in respect of disease contracted by persons employed in the mining industry.
*Disability pensions paid under section 2 of the Social Pensions Act.
*Any compensation paid in terms of the Compensation for Occupational Injuries and Diseases
2.2.1 OPTIONS/RIGHTS TO ACQUIRE MARKETABLE SECURITIES
Gains made by a director or employee in respect of the exercise, cession or release of
a right to acquire marketable securities, i.e. securities, stock, debentures, shares,
options or other interests capable of being sold on a stock exchange or otherwise (this
also includes share, etc. in private companies), must be declared as income if that right
was awarded either in the capacity as a director or former director, or in respect of
services which have been rendered or are still to be rendered to an
employer. Full particulars must be furnished on a separate sheet.
2.2.2 INSURED POLICIES CEDED
If the ownership of an insurance policy was transferred to you by your employer, the
taxable value must be declared here. A valuation certificate must be submitted (also see
2.3 INCOME FROM INVESTMENTS (Part 9)
*If you are either married OUT OF community of property or UNMARRIED, the total income
from investment must be carried to part 2.3.1 of the return.
*If you are married IN community of property, only half of the income form investment must
be carried to part3.1 of the return. The other half is taxable in the hands of your
*An income advice in respect of all investments is to be obtained from the institution
where your funds are invested and attached to page 7 of your return.
*THE FIRST R2 000 OF THE TOTAL AMOUNT OF -
*interest from any interest bearing investment;
*dividends / interest from a property trust;
*dividends on shares in mutual building society; and
*interest on deposits in a building society (which deposits are the
same as shares in a mutual building society) which is not otherwise, is exempt
*The gross amounts must be declared. The exemption will be calculated and
allowed by the Receiver of Revenue.
*All investment income received by or accrued to you, or your minor children (see
paragraph 2.4.4) must be declared (including investment income which has not been paid to
you but has been utilised, accumulated or re-invested for you or your minor
*Where interest is claimed as a deduction against investment income received, full
particulars (i.e. amounts invested/borrowed, interest rates, date of each loan and
investment) must be furnished.
*Your spouse must be taken on register as a provisional taxpayer if his/her gross income
exceeds R3 000.
2.3.1 TAXABLE INTEREST (Part 9.1)
*All taxable interest (including dividends from property trusts - these dividends are
taxed as interest - and the interest content of a unit trust fund distribution).
*Interest on savings accounts, transmission accounts, fixed deposits in a building society
or a mutual building society and dividend/interest on fixed period shares/deposits made on
or after March 1990 must be declared here.
*Interest from a country other than the Republic (see paragraph 22.214.171.124 of this brochure).
N.B. SHOW GROSS AMOUNTS OF ALL INVESTMENT INCOME AS THE EXEMPTIONS WILL
BE DONE BY THE RECEIVER OF REVENUE.
*Dividends received or accrued from any company (including the dividend portion of a unit
trust distribution) are exempt from tax. These dividends must be shown in Part 12 of your
126.96.36.199 SECTION 24J
*During 1995 the Income Tax Act was amended in so far as it relates to the accrual of
interest. An accrual basis has been introduced by section 24J of the Income Tax Act, 1962,
which recognises the spreading of interest on a day to day basis for tax purposes, where
interest must be compounded at least on an annual basis. In respect of individuals these
provisions apply only to financial instruments which have term exceeding one year
(determined from the date of acquisition) and were
acquired at a discount/premium or bear deferred interest.
*A financial instrument which bears deferred interest is an instrument where stepped
interest rates are applicable or an instrument in terms of which all interest, calculated
by applying a constant interest rate over the term of the instrument, is not paid at
regular intervals of 12 months or less.
*It must be noted that the majority of commonly used financial instruments by most
individuals will be excluded from the ambit of section 24 as far as the accrual of
interest is concerned. Instruments or investments excluded are inter alia:
*32 Day call accounts;
*Fixed Deposits not exceeding one year; and
*Fixed Deposits the term of which is longer than one year but all the
interest, calculated at a rate of interest which does not
vary, is paid at least annually.
*Interest has been defined for purposes of section 24J and includes any related finance
charges, discount receivable or premium payable in terms of or in respect of an
instrument. For a holder of an instrument, which will include an investor in stock, the
interest which will be taxable consist of the difference between the purchase price of the
stock and the nominal value of the stock as well as the amounts of all coupon payments
receivable by the holder of the instrument.
*The effect of the accrual basis is that the taxable interest is not based on the actual
coupon receipts, but on an amount determined with reference to the Internal Rate of Return
(IRR) of a financial instrument, based on the future cash flow determined on the date of
acquisition of the financial instrument.
Investment income from another country
188.8.131.52. Income from investment from a country other than the Republic.
Due to the relaxation of exchange controls with effect from 1 July 1997 , and the
expected outflow of capital into foreign
investments , it was necessary to introduce certain measures which are primarily designed
to protect South African tax base against the loss of revenue arising from
investment income earned abroad by persons ordinarily resident in South Africa.
These measures are contained in the provisions of section 9C and 9D.
* A resident is now subject to income Tax on income received/ accrued in respect if
capital invested in his/her own name
(directly) (section 9C) as well as capital invested via an offshore entity
(indirectly) (section 9D).
* The provision of 9C and 9D will be applicable to investment income received/
accrued on or after 1July 1997.
DEFINITIONS AS CONTAINED IN SECTION 9C
*''Investment income'' - means any income in the form of annuities , interest, rentals,
royalties and any income of a similar nature.
*Annuity'' - follows its ordinary meaning , but excludes:
* pensions in consideration of past employment and,
*payments under the social security system of any other country.
* ''Interests'' - mean interest and amounts contemplated in
sections 24 (interest, related finance charges, discounts, premiums, etc. - refer to point
2.3.1 of this brochure) and 24K ( interest rate agreements ) interest of affected
instruments ( e.g. certain preference shares), income arising from money lent, etc.
*" Rental Income '' - means any amount received by or
accrued to a person as consideration for the use of, or the right to use, any
movable or immovable property.
*"Royalty'' - means any natural person who is ordinarily
resident in South Africa and any person other than a natural person , which has its
place of effective management in South Africa, e.g.. companies , close corporation ,
trusts and any other type of corporate entity.
* ''Permanent establishment '' - follows the meaning assigned to
it in terms of the international Model Tax Convention on Income and on Capital of the
Organisation for Economic Co-operation and Development.
DEFINITIONS AS CONTAINED IN SECTION 9D
* "Controlled foreign entity'' means a foreign entity in
which any resident / residents , individually or jointly , directly or
indirectly, have more than 50percent of the participation rights or are entitled to
exercise more than 50 percent of the votes or
control the entity.
* ''Foreign Entity '' - is restricted to persons, other than
natural persons, whose place of effective management is outside the Republic. This will
also include a trust. * ''Participation rights'' - means the right to directly or
indirectly participate in the capital or profits of dividends declared by, or any
other distribution or allocation made by the entity.
* ''Resident '' and'' Investment income'' - same meaning as in
* The section 11 deductions will apply to investment income earned by a controlled foreign
entity in the course of the carrying on of its trade outside the Republic , provided
* any deduction shall be allowed on a appointment basis.
* deductions shall be limited to the investment income; and
* any excess shall be carried forward to the following year.
* A resident will be allowed a rebate (in terms of section 6quat) against normal
tax, any foreign tax payable by the resident or the controlled foreign entity on the
proportional amount of the investment income of such controlled foreign entity which is to
be included in the Income of the resident.
* Proof of payment of such tax must be submitted (refer to 2.4.4 of this brochure)
* The amount appointed to any resident, shall be converted in the monetary unit of the
Republic at a date not later than the end of the financial year of the resident.
* Ruling exchange rate at that date shall apply .
* The same will apply in respect of expenditure.
NB. THE INFORMATION REQUESTED IN THE SCHEDULE TO THE INCOME TAX RETURN MUST BE
FURNISHED, SO AS TO ENABLE THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE TO
DETERMINE TO WHAT EXTENT SUCH INCOME IS TAXABLE IN THE REPUBLIC.
2.4 INCOME FROM OTHER SOURCES
2.4.1. RENTAL: (PART 8)
* If you are either married OUT OF community of property or unmarried , the total
profit/loss must be carried over to part 2.4.1 of the return.
* If you are married IN community of property , only half of the profit /loss must be
carried over to part 2.4.1. of the return.
The other half is taxable in the hands of your spouse.
* If you occupied a portion of a property let by yourself, or if someone else has occupied
it rent free, state the portion of the expenses claimed against rental income which
* Rent pending the exercise of an option to purchase ( irrespective of the fact that such
rent may be set off against the eventual purchase price ) is taxable
* Rental income from a country other than the Republic ( see paragraph 184.108.40.206 ).
* Annuities from retirement annuity funds must be shown here.
2.4.3 OTHER ANNUITIES
* Annuities from ex-employers, insurance policies, trusts, estates and purchase annuities
must the declared here. The name of the employer , insurance company , estate , trust or
fund who/which paid the annuity , the nature and/or person for the payment and the
amount thereof must be shown. The capital content of a purchased annuity is exempt from
A certificate from the insurance company, reflecting the capital content ,
must be attached.
* A lump sum (excluding capital element ) received or accrued in consequence of the
retirement of the termination or commutation of a purchased annuity is taxable and must
the shown here.
* Annuities from a country other than the Republic excluding pensions in
consideration of past employment and payments under the social security of that country.
2.4.4 OTHER RECEIPTS AND ACCRUALS
* EXECUTORS, CURATOR'S OR SIMILAR FEES, ROYALTIES, HONORARIA AND ANY PAYMENT ,ACCRUAL OR
RECEIPT, FROM WHATEVER SOURCE, PARTICULARS OF THE NATURE AND ORIGIN OF THE INCOME MUST BE
SET OUT ON A SEPARATE SHEET , IF YOU WISH TO CLAIM A REBATE IN RESPECT OF FOREIGN
TAX PAID, FURNISH FULL PARTICULARS OF THE CLAIM , INCLUDING PROOF THAT PAYMENTS OF SUCH
TAX WAS MADE WITHOUT ANY RIGHT OF RECOVERY.
* INCOME OF MINOR CHILDREN . You are liable for the payment of tax on any income
which has been received by or accrued to or in favour of any of your minor children or has
been spent on the maintenance, education, or for the benefit of the child, or was
accumulated for the benefit of the child , if such income arises from a donation ,
settlement or other disposition by - (i) you ; or (ii) any other person, if you made a
donation , settlement , or other disposition or gave some other consideration
directly or indirectly in favour of the other person or his family.
* You minor child will, however, be liable for tax on income which is received by or
accrues to him/her independently of yourself; in his/her or received as a gift from any
person other than the person mentioned in (i) and (ii) above or from any other
source. This income must be shown in part 12.4 of your return. Should your
childs taxable income be a sufficient to render him/her liable to tax, you, as
the legal guardian, must obtain and submit an income tax return on his /her behalf.
* FOREIGN INVESTMENT COMPANIES, Income derived by you from a foreign investment company or
similar institution is taxable to the extent of your interest in the untaxed profits of
such institution. details of such interest must be furnished.
2.4.6. (2.4.8. in IT 12) LUMP SUM BENEFITS
* Lump sum benefits from pension, provident and retirement annuity funds
must be declared . If tax was deducted, the IRP 5 certificate must be attached to
page 7 of your return. The Receiver of Revenue will determine the taxable portion of the
benefit and the applicable rate of tax.
2.4.7 (2.4.9 in IT 12 ) GRATUITIES
* Any amount received from your employer in the form of a gratuity , including
amounts received as a result of the
termination of your services, must be declared.
* The Receiver of Revenue will determine the taxable portion and the applicable rate of
* THE CIRCUMSTANCES UNDER WHICH ALL SUCH AWARDS WERE MADE, MUST BE SET OUT IN DETAIL
AND THE AMOUNT MUST BE SHOWN SEPARATELY FROM OTHER REMUNERATION.
2.4.8 (2.4.10 in IT 12) PROTO - TEAMS
* Income received by or accrued to a mineworker, over and above his normal
remuneration and allowance, as a member of proto-team for performing any hazardous task
during an emergency in a mine, must be declared here.
* The Receiver of Revenue will determine the applicable rate of tax.