Page 359 - SAIT Compendium 2016 Volume2

IN 20 (6) Income Tax acT: InTeRPReTaTIon noTes IN 20 (6) learnership agreement [section 12H(5)]. The criteria prescribed by the Commissioner relating to disability are contained
in form ITR-DD ‘Con rmation of Diagnosis of Disability’, which is available on the SARS website.
4.5 Prohibition of learnership allowances
Section 12H(6) has been amended to eliminate the requirement that an employer must take into account all previous learnership agreements with former employers. This amendment is effective for learnership agreements that are entered into on or after 1 January 2013. An employer may not claim any annual allowance or any completion allowance for a new registered learnership agreement if –
• a learner, who is party to the new registered learnership agreement, has previously failed to complete any other registered learnership agreement to which the employer or an associated institution was a party; and
• the other registered learnership agreement contains the same education and training component as the new registered learnership agreement.
4.6 The quantum of the annual allowance
The annual allowance is deductible in each year of assessment in which the learnership agreement is in force.*
4.6.1 For 12 full months during any year of assessment
The quantum of the annual allowance is equal to –
• R30 000; or
• R50 000 if the learner is a person with a ‘disability’ as de ned in section 18(3).
4.6.2 For each period of less than 12 full months during any year of assessment
The annual allowance is a pro rata portion if the learner is a party to a registered learnership agreement for less than 12 full months during the year of assessment.† Apportionment will therefore apply if the learnership agreement commenced or ended partway through the year of assessment. The meaning of a ‘month’ was discussed by James JP in Subbulutchmi v Minister of Police & another, in which he said the following:‡
‘According to the Interpretation Act 33 of 1957 a month means a calendar month. In the absence of any clear indication to the contrary to be found in the words used in any particular legislation a calendar month running from an arbitrary date expires with the day in the succeeding month immediately preceding the day corresponding to the date upon which the period starts. Thus, if a calendar month commences on the 10th of one month it will expire at the end of the 9th day of the succeeding month. See Nair v Naicker 1942 NPD 3 in which BROOME J undertook an extensive review of the cases decided up to that date.
‘This is in accordance with the ordinary civilian method of calculating periods of time in which the rst day is excluded and the last day included. See Joubert v Enslin 1910 AD 6 at 35; South African Mutual Fire and General Insurance Co Ltd v Fouche; AA Mutual Insurance Association Ltd v Tlabakoe 1970 (1) SA 302 (a).’
Thus, if an employer’s year of assessment ends on 31 December, and an employee commenced a nine-month learnership on 10 February the learnership would be completed on 9 November and there would be nine full months. But if the same learnership commenced on 15 October of year one it would be completed on 14 July of year two, and there would be two full months in year one and six full months in year two. The quantum of the annual allowance is equal to –
• a pro rata portion of R30 000; or
• a pro rata portion of R50 000 if the learner is a person with a ‘disability’ as de ned in section 18(3).
The pro rata portion is calculated in the same ratio as the number of full months that the learner is a party to the agreement during the year of assessment bears to 12 full months.
Example 2 – Calculation of the annual allowance
Facts:
On 1 January 2013 Employer A entered into an 18-month registered learnership agreement with Learner B (not a person with a disability). Employer A’s year of assessment ends on 31 December. Calculate the amount of the annual allowance Employer A may deduct in the 2013 and 2014 years of assessment.
Result:
2013 Year of assessment
Employer A may deduct an annual allowance of R30 000 under section 12H(2)(a).
2014 Year of assessment
Learner B is a party to a learnership agreement with Employer A for only six full months during the year of assessment. Employer A may deduct a pro rata annual allowance of R15 000 (6/12) of the R30 000 annual allowance.
See Examples 3 and 4 for the calculation of the completionallowance.
* Section 12H(2)(a).
† Section 12H(2)(b).
‡ 1980 (3) SA 396 (D) at 397.
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