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Individuals- Fringe Benefits 3rd Year (Meals, Refreshments & Meal &…
Individuals- Fringe Benefits 3rd Year
Fringe Benefits
-Included in GI
Value of Benefit LESS amount paid by EE= Taxable Benefit(Cash Equivalent)
Assets Acquired @ Less Than Actual Value
Cash Equivalent
: MV of Assets less Consideration by EE
Special Rules
:
-Value= CP (Excl. VAT) for movable asset purchased by ER
-Value= Lower CP or MV for TS
-Value= Value reduced by lower of CP & R5000 for Bravery/ Long Service Award
No Value
:
Immovable Property acquired by EE UNLESS;
-Remuneration proxy >R250 000, OR
-MV of property >R450 000, OR
-EE & ER are connected persons
Use of Sundry Assets
Special Rules
:
-Value of pvt. use= Rent by ER (if leased)
-Value of pvt. use= 15% x lesser of CP/MV apportioned for days (If owned)
-Value of pvt. use= CP (if EE has sole ROU or use for major portion of its life
Cash Equivalent
: Value of pvt. use less consideration by EE
No Value
:
-Pvt. use is incidental to trade
-TV/computer used mainly (>50%) for business
-Asset consist of books.., literature, recordings or art
-Asset used by EE's in general or for short periods where value of pvt. use is negligible
-Amenity enjoyed at EE's place of work OR for recreational purposes at work OR place of recreation provided to EE's in general
ROU Motor Vehicle
Cash Equivalent
: Value pvt. use less EE consideration
Special Rules
:
-Value pvt. use/ month=
Determined Value
x3.25% with maintenance plan
-Value pvt. use/month=
Determined Value
x3.5% no maintenance plan
-Value pvt. use/month= Actual cost to ER+Fuel costs if operating lease
Determined Value
Before 1 March 2015
-Original Cost (incl. VAT) if Acquired by ER
-MV @ time ER obtained ROU if any other case
Reduce DV by 15% for every FULL 12 months since acquisition till EE obtains ROU
On or After 1 March 2015
-Retail MV (Excl. finance charges) if manufactured/ acquired by ER
-Retail MV @ time ER acquired if leased by ER
-Reduce by 15% every FULL 12 months since acquisition till EE gets ROU
Value of Pvt. Use Reductions
Par 7(7)
-If EE keeps accurate records of business distance (logbook)
Must be done on assessment of EE tax liability
Value pvt. use LESS Business km/Total km
Par 7(8)
-EE bears ALL fuel cost
-Must keep logbook
Value pvt. use LESS fuel rate for travel allowance x pvt km/total km
-EE bears FULL cost of license, insurance & maintenance
Value of pvt. use LESS cost by EE x pvt km/total km
No Values
-If used by EE's in general & pvt. is infrequent/incidental to business
-Not parked at EE's house (Pool car)
-Nature of EE's duties require them to use car outside of work
Meals, Refreshments & Meal & Refreshment Vouchers
Cash Equivalent
-Value of meals, refreshments or voucher less EE compensation
Special Rules
-Value of meal= Cost for ER
No Value
-Meal/refreshment by ER to EE @ canteen operated by ER
-Meal/refreshment supplied on ER business premises
-Meal/refreshment supplied by ER to EE during business hrs or overtime
-Meal/refreshment supplied on special occasions
-Meal/refreshment enjoyed by EE in course of entertaining someone for ER
Exclusion
-Board/meals provided with residential accommodation
Low Interest Debt
Cash Equivalent
Interest on outstanding @ official rate
less
interest by EE
Official interest rate= repo rate + 1%(loan in R)
=equivalent of repo +1% (loan in foreign currency)
Special Rules
Residential Accommodation taxed as low interest rate loan if:
-EE lives in house owned by ER & EE or spouse/minor child is entitled/obliged to acquire house from ER in future @ a price in agreement
-Then rental is calculated as a % of purchase price
**Cash Equivalent= price x (official interest rate- rate to calculate rentals)
No Values
-Debts <= R3 000
-Debt is to enable EE to further his/her studies
Contributions to Funds (Par12D)
Cash Equivalent
-Cont. by ER
No Value
-Benefit of member who retired from a fund
-Benefit of the defendants of deceased member