Page 194 - SAIT Compendium 2016 Volume2

IN 5 (2) Income Tax acT: InTeRPReTaTIon noTes IN 6 (2)
As the xed monthly remuneration (R215 000) received by the director during the 2006 year of assessment is more than 75% of ‘T’ in the formula (R210 000), employees’ tax for 2007 year of assessment must be deducted on the actual remuneration (after the deduction of RAF contributions) received by the director.
Note: If the xed monthly remuneration for the 2006 year of assessment (after the deduction of RAF) was R205 000 (i. e. not more than 75% of ‘T’, which is R210 000), PAYE for the 2007 year of assessment would be required to be deducted according to the tax tables from the deemed remuneration of R23 333 (R280 000/12) as the xed monthly remuneration for the 2006 year of assessment was not more than 75% of ‘T’ in the formula.
ANNEXURE B
THE TAXATION IMPLICATIONS OF PARAGRAPH 11C (6)
APLICABLE TO: DIRECTORS OF PRIVATE COMPANIES MEMBERS OF CLOSE CORPORATIONS
Where ‘ xed monthly payment’ are greater than 75% of ‘T’ in the last year of assessment
Where ‘ xed monthly payment’ are 75% of ‘T’ or less in the last year of assessment
Employees’ tax is calculated on the actual remuneration
Employees’ tax is calculated on deemened remuneration in terms of the prescribed formulae: Y = T/N
Deeming provisions of paragraph 11C are not applicable
Paragraph 11C is applicable
Interpretation Note: No. 6 (Issue 2)
Resident: Place of Effective Management (Companies)
DATE: ACT: SECTION: SUBJECT:
Preamble
3 November 2015
Income Tax Act 58 of 1962
Section 1(1)
Resident – place of effective management (companies)
CONTENTS
1. Purpose
2. Background
3. The law
4. Application of the law
4.1 General principle – the meaning of place of effective management
186 saIT comPendIum oF Tax LegIsLaTIon VoLume 2