100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Summary Taxation 298 Term 4 notes $3.86
Add to cart

Summary

Summary Taxation 298 Term 4 notes

1 review
 150 views  17 purchases
  • Course
  • Institution

Tax 298 notes, questions and examples on - Employees Tax - Capital Gains Tax

Preview 4 out of 43  pages

  • October 19, 2020
  • 43
  • 2020/2021
  • Summary

1  review

review-writer-avatar

By: samstuart • 1 year ago

avatar-seller
Term 4

, Table of Contents
Chapter 10: Employees Tax ............................................................................ 3
Chapter 17: Capital Gains Tax ....................................................................... 22

,Chapter 10: Employees Tax

o Introduction

• employee’s tax is not an actual tax = a payment mechanism through which normal tax is collected.
• technically it is a withholding tax which is deducted at the source.
• The employee’s normal tax payable is reduced by the employee’s tax that was deducted from remuneration during
year


• Where an employer pays or is liable to pay an employee any remuneration:

è the employer has an obligation to deduct / withhold employees’ tax from this remuneration and the amount over
to SARS each month
è Mostly, the employer has to issue every employee with an employees’ tax certificate [IRP5/IT3 (a)] at the end of
each tax period showing the amount deducted for employees’ tax


• the employer must pay the withheld employee tax to SARS within 7 days after the end of the month when it was
withheld.
• If 7th day falls on a weekend or public holiday then the amount must be paid no later than the previous business day
before the weekend or public holiday as per section 244(1) of the Tax Administration Act


v Section 157 of the Tax Administration Act (TAA) and par 5:
• If the employer does not withhold employee’s tax or does actually withhold it but fails to pay the amount over to
SARS, the employer is then personally liable for the tax
• This liability for tax payment of the employer is a penalty (par5(5)) and so the employer cannot claim a deduction
section 11(a) of the ITA as this is prohibited by section 23(d).

v The link between the 4th Schedule and the ITA
• s 89bis(1) provides that the payment of employees’ tax (Ch 10) and provisional tax (Ch 11) must be made in
accordance with the provisions of the 4th Schedule to the ITA and that said payments are deemed to be made in
respect of taxpayer’s liability for “taxes”.
• The term “taxes” is defined in s 89bis(3) as bearing the same meaning as the term “tax” as defined in s 1(1) but
specifically excludes donations tax. The term “tax” in s 1(1) is defined as “any tax or a penalty imposed in terms of
this Act”.
• Therefore a liability for donations tax is not settled by way of employees’ tax or provisional tax payments.



v Definitions: Par 1 of the 4th Schedule to the ITA

Employer - the
Employee - the
Remuneration - the
Employee’s Tax - the
Labour broker - the
Personal service provider - the

, v BEFORE employee’s tax can be deducted:

4th Schedule requires the presence of all 3 elements
- employee, employer, remuneration

è an employer paying remuneration to an employee

Central definition: ‘remuneration’ - because it drives the application and relevance of the other two –
definition of employee requires that remuneration is received, and the definition of employer requires that remuneration
is paid.



o Remuneration

1) Calculate ‘remuneration’ and calculate employee’s tax = separate per employer for each individual employee

- Usually each remuneration amount which is paid or accrues to an employee will be subject to employee tax on that
amount – can be subject to exceptions or special rate rules

- If the amount is not defined as remuneration it will not be subject to employees tax

- 3 part definition: general definition, special inclusions and exclusions

• Non-residents: employee’s tax calculated only on remuneration earned from an RSA source
• Par 2(1) – Employee shall withhold employee’s tax when remuneration is paid or becomes liable to pay
amount to the employee.
• Par 2(1B) – employee’s tax on variable remuneration (s 7B) shall be withheld on the date on which amount
is paid to the employee.
• Variable remuneration is deemed to accrue to the employee on the exact date when the amount is paid
from the employer to the employee


DEFINITION AS PER PARAGRAPH 1:

Remuneration
• Amount of INCOME → exempt income NOT remuneration
• Paid or payable
• To any person
• By way of any: GENERAL part of the
• Salaries & wages / leave pay / overtime / bonus definition, followed
• Gratuity / Commission / fees /Pension / superannuation allowance by special inclusions
• Retirement allowance / stipend
• Whether in cash or otherwise
• Whether or not for services rendered

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller lexishtein. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $3.86. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

52355 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$3.86  17x  sold
  • (1)
Add to cart
Added