3.1 MEDICAL DENTAL EXPENSES
* Claim the following amounts ACTUALLY PAID BY YOURSELF in respect of yourself,
your spouse and your qualifying children or stepchildren.
* Contribution to a medical aid scheme approved in terms of the Medical Schemes Act.
* Expenses paid by yourself and not recoverable from a medical fund in respect of :
* service rendered and medicines supplied by a registered medical
practitioner , dentist , optometrist, homeopath, naturopath,
osteopath, herbalists , physiotherapist, chiropractor or orthoptist;
* hospitalisation in registered hospital or nursing clinic;
* home nursing by a registered nurse ; or
* prescribed medicines acquired from a registered pharmacist.
* Medical expenses incurred and paid outside the Republic.
* Expenditure necessarily incurred and paid in consequence of a
physical disability suffered by you, your spouse or qualifying
children. The nature of the disability , as well as details of how the amount claim
was calculated, must be stated.
* The allowable deduction is subject to the following limitations:
*TAXPAYERS UNDER THE AGE OF 65 YEARS : Expenses will be limited to :
* That portion of the expenses referred to above which exceeds the greater of R1 000 or 5%
of taxable income before this deduction. In other words the first R1 000 or 5% of such
taxable income, which ever is the greater , does not qualify as a deduction.
* Where the taxpayer , his spouse , qualifying child or stepchild , is a ''handicapped
person'', that portion of the expenses referred to above which exceeds R500 , in other
words, the first R500 does not qualify as a deduction . A''HANDICAPPED PERSON''
, means a blind person, a deaf person who as a result of a permanent disability
requires a wheelchair, calliper or clutch to assist him to move from one place to another
or a person who requires an artificial
limb. It also includes a person who suffers from mental illness. A mental illness is
a disorder or disability of the mind and includes any arrested or incomplete development
of the mind.
* Please claim all the qualifying expenses. The limitation will be calculated by the
Receiver of Revenue.
* TAXPAYERS 65 YEARS AND OLDER are entitled to deduct all the
expenses referred to above, without any limitation.
* KEEP YOUR RECEIPTS TO PROVE YOUR CLAIM
* A child or stepchild means the taxpayers child or stepchild who was alive during
any portion of the year of assessment, and who on the last day of the year of assessment -
(a) V./s unmarried d and was not or would not, had he lived ,
have been -
(i) over the age of 18 years;
(ii) over the age of 21 years and was wholly o r partially dependent
for his maintenance upon the taxpayer and has not become liable for payment of
normal tax in respect of such year ; or
(iii) over the age of 26 years and was wholly or partially
dependent for his maintenance upon the taxpayer and has not
become liable for the payment of normal tax in respect of such year and was a
full-time students at an educational institution
of a public character; or
(b) In the case of any other child or stepchild, was incapacitated by physical or mental
infirmity from maintenance himself and was wholly or partially dependant for this
maintenance upon the taxpayer and has not become liable for the payment of normal tax in
respect of the year of assessment . For the purposes of determining the liability for the
payment of normal tax, the minimum liability as determined for SITE purposes, is
3.2 TOOL ALLOWANCE
* Maximum - R75
* Allowed to artisan/technicians who provide their own tools for use in their trade.
* Only donations to universities , colleges ( including technikons) and
approved educational funds may be claimed.
* Normal school fees do not qualify as a donation.
* The maximum to be allowed is the greater of:-
* R500 : or * 2% of your taxable income before the deduction of this claim and medical
expenses. This calculation will be done by the Receiver of Revenue .
* RECEIPTS MUST BE ATTACHED TO PAGE 7 OF YOUR RETURN
3.4 CURRENT CONTRIBUTIONS TO AN APPROVED PENSION FUND
* Maximum deduction per person is the greater of -
* R1 750 ; or
* 7.5% of your remuneration from retirement -funding employment for the tax year.
*Claim your actual contributions, as the calculators will be done by the Receiver of
3.5 ARREAR CONTRIBUTIONS TO AN APPROVED PENSION FUND
* Claim your actual contributions - MAXIMUM R1 800
* Any excess will be carried forward to the succeeding year of assessment.
3.6 CURRENT CONTRIBUTIONS TO APPROVED RETIREMENT
* The maximum deduction permitted per taxpayer is limited to the greater of:-
* 15% of taxable income (excluding income fro retirement -funding employment - see 3.4
above ) - when determining taxable income , the following deductions must NOT be taken
* capital development expenditure ( farming) ; * donations;
* retirement annuity fund contributions; * medical and dental expenses;
* expenditure i.r.o. soil erosion works;
* R3 500 less allowable pension fund, contributions ; or
* Claim you actual contributions , as the calculation will be done by the Receiver of
* Any excess will be carried forward to the succeeding year of assessment.
3.6.1 MEMBERS OF A PENSION OR PROVIDENT FUND
* If you contributed more than R1 750, furnish confirmation from your employer in respect
of the following :
* name of pension /provident fund of which you are a member (contributory or
non-contributory ) ; and
* which portion of your gross remuneration ( as indicated on your IRP 5 certificate ) was
taken into account to determine the
contributions to the pension /provident fund.
3.7 ARREAR CONTRIBUTIONS TO APPROVED RETIREMENT ANNUITY FUNDS
* Claim your actual contributions - MAXIMUM R1800 in the case of any
* An excess will be carried forward to the following year of assessment.
3.8 ENTERTAINMENT EXPENSES
* IF YOU RECEIVED AN ENTERTAINMENT ALLOWANCE and wish to claim a deduction
of entertainment expenses, the following information must be furnished :
* Position held - e.g. managing director , salesman, etc: - nature of duties:
* whom entertained - name of person and his/her employer ; - nature of entertainment ; and
* the cost of thereof 8 Does your position or the performance of your entail regular and
necessary entertainment expenditure.
* The claim is limited to the LESSER of -
* actual expenditure ; * the amount of the allowance ; * R2 500; or
* 5% of your actual taxable income from the trade in question (minimum R300)
* A CLAIM FORE A DEDUCTION OF THE AMOUNT OF THE ALLOWANCE OR A PERCENTAGE OF
REMUNERATION WILL NOT AUTOMATICALLY BE ALLOWED.
* AGENTS AND REPRESENTATIVES who derive their remuneration, wholly or mainly , in
the form of commission based on sales or turnover , are entitled to deduct entertainment
expenditure actually incurred in the production of their income. The information requested
above must be furnished before such a claim will be considered.
3.9 TRAVELLING EXPENSES ( SEE PART 10 OF THE RETURN)
Travelling expenses may be claimed according to one of the following methods.:
* WHERE ACCURATE RECORDS OR EXPENSES HAVE BEEN KEPT (Complete part10.3 of
* (i) (actual business kilometres/total kilometres travelled) x actual expenses. Accurate
logbook must be submitted
*(ii) (business kilometres (maximum 18 000)/Total kilometres travelled) x actual expenses.
Where no logbook is submitted
* WHERE NO RECORD OF EXPENSES HAS BEEN KEPT ( Complete part 10.4 of the
*(iii) actual business kilometres * kilometre rate ( ACCURATE LOGBOOK MUST BE
*(iv) business kilometres ( maximum 18 00) x kilometre rate ( WHERE NO LOGBOOK IS
*Method (i) and (ii) may be used only when an accurate logbook of distance travelled
is kept and a copy thereof accompanies your return.
* Methods (ii) , (iii) and (iv) may be used only if you received a travelling allowance.
* Details as requested in part 10.1 and 10.2 of the return must be furnished in all cases.
* It is essential in all cases to furnish accurate odometer readings of the relevant motor
vehicles as on 1/3/97 28/2/98 in
part 10.2 of the return.
* Unless accurate records of kilometres travelled both for business and private have been
kept, the first 14 000 km travelled
will be deemed to be for private purposes. Business kilometres are deemed to be equal to
the difference between total kilometres travelled and 14 000 km provided that it does not
exceed 18 000km
* If the vehicle was used for business purposes for a period of less than 12 months
, the distance of 14 000 and 18 000 km respectively, must be reduced pro rata in respect
of the period the vehicle was used for business purposes
* Travelling between your residence and place of employment is private travelling.
* If you received a travelling allowance the deduction may not exceed the allowance
* where you used more than one motor vehicle during the year of assessment primarily for
business purposes , you must prove by way of a logbook that each vehicle was primarilly
used for business purposes to prevent the deemed 14 000km for private use being
applied to each vehicle . (Primary use means more than one 50% of total use).
* If you receive a travelling allowance in respect of a vehicle that is made available to
you by your employer , only actual
expenditure may be claimed.
* The wear and tear allowance must be calculated at a rate of 20% p.a on the reduced
value of the vehicle at the beginning of this year of assessment.
* Where a motor vehicle was acquired during the year , wear and tear will only be
allowed pro rata.
* if the motor vehicle was disposed of during the year of assessment the loss suffered or
profit made must the taken into
account in the calculation of your claim . Such profit or loss must not be taken
into account where the travelling expenditure is
claimed against a travelling allowance.
* Where a motor vehicle is acquired for no consideration and no cost price is available,
the market value is at the date it was
acquired should be shown and wear and tear calculated from the date of acquisition
according to the above method .
* Similarly where a vehicle was previously used for private purpose and has been
brought into use for the purposes of your trade, wear and tear should be calculated on the
diminishing balance method from the date it was acquired.
* Where a travelling allowance was received , the amount of the deduction to be claimed
may be based on the kilometre rate
established in accordance with the tariffs set out in the schedule below. ''Value''
in relation to a motor vehicle means -:
* where the vehicle was acquired by you under a bona fide agreement of sale or exchange ,
the original cost thereof to you,
including any sales tax or value added tax paid by you, but excluding any finance charges
or interest payable by you in
respect of the acquisition thereof:
* Where the vehicle is held, by you , under a financial lease as contemplated in paragraph
1 of the 4th Schedule to the Sales Tax Act , 1978 or a lease as contemplated in paragraph
(b) of the definition of '' Instalment credit agreement '' in section 1 of the
ValueAdded Tax Act, 1991, or you acquired ownership on termination of the
lease, the cash value thereof as determined under the said Schedule 4, together with any
Sales Tax paid by the lessor , or the cash value thereof as contemplated in the definition
of '' cash value'' in section 1 of the Value Added Tax Act; or In any other case the
market value of the motor vehicle at the time you first obtained the vehicle or the right
to use it, plus any sales/ value added tax which would have been payable on the
* where expenses for more that one vehicle are claimed, reasons must be furnished
why more than one vehicle was used.
3.10 OTHER DEDUCTIONS
* State the nature of the expenditure claimed if not covered by parts 3.1 to 3.9
Study at private residence
* The deduction of any expenses relating to any residence or domestic premises
residence is prohibited except in
respect of such parts as may be occupied for purposes of trade. Such part of the premises
will only be regarded as being used for trade if:
1. It is specifically equipped for purposes of your trade; and
2. It is used regularly and exclusively for such purposes.
* If the income against which the deduction is claimed flows from the holding of
employment or an office no deduction is allowable, unless:
1. If your income from such employment or office is derived mainly from commission or
other variable payments which are based on your work performance and your duties are
mainly performed than in an office which s provided to you by your employer; or
2. Your duties are mainly performed in the study at your private residence.
* The following guidelines are given with regard to a claim for as home study. full
details in support of your claim must be submitted with your return. Documentation in
substantiation of the claim is to be kept and only sent to the Receiver of Revenue on
1. There must be a direct relationship between the incurring of the expenses on a study
and the production of income.
2. You must, in terms of the requirements of a service contract with your employer, be
required to maintain a study at your private residence.
3. The study may be used only for business purposes.
4. To enable the Receiver of Revenue to decide whether you are entitled to a deduction for
a study or not, the following questions are to be answered / details supplied.
4.1 What is the nature of your occupation, and why is it necessary to maintain a study at
4.2 A copy of your service contract, service regulations or personnel code.
4.3 Does your employer place an office at your disposal at your workplace? Full details of
any restrictions in the use of this officeare to be furnished, as well as a letter of
confirmation from your
4.4 Is your work of such a nature that you are expected to work at homeafter hours? Full
details of how frequently you use the home study as well as a statement confirming the use
thereof is required from your
4.5 Are you required to use the home study to interview or supplyinformation to clients or
employees after hours?
4.6 Is your home study specifically equipped for purposes of your trade?
4.7 Is your study used regularly and exclusively for your work?
4.8 To what extent is the study indispensable to the proper carrying out of your tasks?
5. Should you qualify for a deduction the amount will be calculated on the following
A/B x Total Costs
Where A = The area m2 of the area specifically equipped and used regularly and exclusively
for trade, and B = The total area m2 (including any outbuildings and the area used for
trade) of the residence, and Total costs = the costs incurred in the acquisition and
upkeep of the property. (Excluding expenses of a capital nature.)
Repairs specifically made to the study will not be apportioned, but allowed in full.
Repairs to the building in general are not included in total costs.
Reduction in value of benefit in respect of the private use of your employer's
* The taxable benefit which arises from the private use of a motor vehicle supplied
value of benefit by an employer, is based on the assumption that the distance covered for
private in respect of use (including travel between home and work) amounts t0 10000
km for the year. the private use If you have travelled less than 10000 km and have kept
accurate records in the of your employer's form of logbook, a copy of which must be
submitted with your tax return, you motor vehicle claim a deduction under part 3.10 on
page 3 of the return.
* The reduction in the value of the benefit will not apply where more than one vehicle was
made available to you at the same time and only the benefit of the more expensive vehicle
has been taken into account as a fringe benefit, unless less than 10000 kilometres have
been travelled with both vehicles.
Subsistence allowances which are included in gross remuneration
* The unexpended portion of a subsistence allowance is subject to tax.
* Where you were by reason of your duties obliged to spend at least one night away which
are from your usual place of
residence in the Republic and -
* the cost of accommodation was borne by you and you received an allowance gross remuner-
in excess of R150 per day; or
* the cost of accommodation was borne by you and you received an allowance in excess of
R65 per day you may claim the amounts actually expended as a deduction against the
allowance. You may not merely claim an amount of R150 or R65 per day. as the case may be,
as a deduction.
* The deduction will be limited to the lesser of the expenses actually incurred or the
* If you are also in receipt of a travelling allowance, your employer must confirm the
amount attributable to each allowance.
Holders of a public office
*Any allowance granted to that holder of a public office to enable him to defray public
office expenditure incurred by him in
connection with his office is deemed to have been expended to the extent he has actually
incurred expenses for the purpose of his office in respect of -
* secretarial services * telephone * stationery * office accommodation * postage
* travelling * hospitality extended at any official or civic function, hospitality of a
casual nature - actual expenditure
limited to the lesser of R2500 or %% of such remuneration and allowances; and
* subsistence and incidental costs while away from his usual place of residence. Refer to
subsistence allowances above.
* Holders of a public office include -
* A Minister or Deputy Minister of the Republic, a member of Parliament, the
Presidents Council, a member of a provincial
* a member of a municipality or similar local institution, and a president, chairman or
chief executive officer of a national or
regional non-profit making organisation representing persons with common interests and
deriving funds wholly or mainly from subscriptions of members or donations from the
Standard income tax on employees (SITE) an employees tax (PAYE) deductions can
only be taken into account if the relevant IRP5 certificates are attached to your return.
This section is to be completed in respect of any fringe benefits you have received,
whether included on your IRP5 certificate or not.
If your return and supporting schedules were prepared or partly prepared by another
person for reward, such person must also sign the return and furnish his name and address.
This information is required to determine the rebates for which you qualify. The
* A rebate of R2500 will be allowed if you were 65 years or older on 28 February 1998.
* A primary rebate of R3215 will be allowed
See paragraph 2.4.1
Your interest must be attached to page 7 of your return.
See paragraph 3.9