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Asset depreciation is an easy way to reduce your tax bill. 10 Critical Facts you need to know about Depreciation.
1. Depreciation is not the same as Amortization. Depreciation is the terminology used for fixed assets. Amortization is the terminology used for intangible assets.
Natural persons, excluding sole proprietors, are exempt from provisional tax if either:
• the taxable income does not exceed the tax threshold; or
• the taxable income from dividends (e.g. REIT distributions), interest, foreign dividends, rental from letting immovable property and remuneration from an employer not registered for PAYE, does not exceed R30 000.
If you’re a sole trader or in a partnership, you’re likely assessing Pty Ltd Company advantages and whether setting up a Pty Ltd Company would be suitable for your situation. Tax and other considerations affect the choice of business vehicle.
A subsistence allowance is any allowance given to an employee or a holder of any office for expenses incurred or to be incurred in respect of personal subsistence and incidental costs (for example, drinks, lunch, parking).
According to Income Tax Notice 2130, the list of persons required to submit income tax returns includes:
Every company or other juristic person, which was a resident during the 2022 year of assessment that
Submit your tax return forms online quickly and easily using SARS eFiling.
In order to use SARS eFiling, you will need your own tax reference number.
If you do not have one, please see how to get a South African tax number.
Are you registered as a taxpayer? Step by Step guide on how to get a tax number.
Rather than focusing on cutting your tax bill, I propose a different strategy to my clients: Focus on growing wealth and use the year-end time to review your financial situation and make changes, if necessary.
Previously, South African tax residents who worked abroad for longer than 183 days (of which 60 were consecutive) annually were tax exempt on their foreign employment earnings. This changed in March 2020, with an update to the Income Tax Act that closed the tax exemption loophole for South Africans living abroad
In South Africa, there is no tax payable by a beneficiary on assets received from an inheritance. SARS explains the situation as follows: ‘An asset inherited is a “capital receipt” and is therefore not included in the taxpayer’s gross income. Therefore, in South Africa, there is no tax payable by a person who receives an inheritance. Capital Gains Tax (CGT) is also not payable by the recipient of an inheritance.’
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