Tax legislation provides for a taxpayer to claim certain expenses incurred during a year of assessment against the income received. However, the type of expenses you can claim is dependent on the type of income you received.
Expenses allowed by the law for different types of income are the following:
- Pension fund contributions
- Retirement annuity fund contributions
- Provident fund contributions (only from 1 March 2016)
- Legal costs – under certain qualifying circumstances
- Wear–and-tear – in respect of certain assets
- Donations – to approved bodies
- Repayable amounts – amount received for services rendered as refunded by that person
- Bad and doubtful debts – employment related.
Commission, independent contractors, holders of public office
Taxpayers who earn commission income will have to consult section 11(a) of the Income Tax Act no 58 of 1962 to determine exactly what expenses can be claimed. Also see section 8 (1)(d) in respect of holders of public office. For more information, see our ITR12 Comprehensive Guide.
Top Tips: Salary earners who receive certain allowances (for example a travel or car allowance or a taxable subsistence allowance) can claim against the allowance.
Property owners who earn rental income from a property can claim certain expenses relating to the property.
Individuals involved in a trade (a sole proprietor, partnership or a farmer, etc.) can claim certain expenses relating to the production of that income.
LAPD-IT-G01 – Guide on Income Tax and the Individual
LAPD-IT-G02 – Guide on the Residence Basis of Taxation for Individuals
LAPD-IT-G03 – Guide on the calculation of the tax payable on lump sum benefits
LAPD-IT-G04 – Guide on the Ring Fencing of Assessed Losses Arising from Certain Trades Conducted by Individuals
LAPD-IT-G09 – Guide on the Tax Incentive for Learnership Agreements
LAPD-IT-G21 – Guide on the Taxation of Foreigners working in South Africa
LAPD-IT-G25 – Guide to the Exemption from normal tax of income from films