Page 364 - SAIT Compendium 2016 Volume2

IN 20 (6) Income Tax acT: InTeRPReTaTIon noTes IN 20 (6)
(c) Employee Z
Year of assessment ending 31 March 2014 12-Month learnership
An annual allowance of R22 500 is deductible because the learner is a party to the registered learnership agreement with the employer for only nine full months.
R30 000 × 9 / 12 = R22 500
Year of assessment ending 31 March 2015 12-Month learnership
1. An annual allowance of R7 500 is deductible because the learner is a party to the registered learnership agreement with the employer for only three full months. R30 000 × 3 / 12 = R7 500
2. No completion allowance is deductible because the learner did not successfully complete the learnership.
New registered learnership extending over two years
No amount is deductible since section 12H(6) prohibits any deduction for the new registered learnership agreement under the same employer and with the same education and training component.
(d) Employee D
Year of assessment ending 31 March 2014
An annual allowance of R50 000 is deductible because the learner (a person with a disability) is a party to the registered learnership agreement with the employer for 12 full months.
Year of assessment ending 31 March 2015
1. An annual allowance of R25 000 is deductible because the learner (a person with a disability) is a party to the registered learnership agreement with the employer for only six full months. R50 000 × 6 / 12 = R25 000
2 A completion allowance of R50 000 is deductible
The completion allowance in this case is R50 000 because the learnership agreement is for a period of less than 24 months [section 12H(3)].
6. Conclusion
Section 12H provides an annual allowance and a completion allowance to employers that are a party to a qualifying learnership agreement with an employee. The annual allowance of R30 000 is subject to a pro rata reduction when the number of full months in a year of assessment is less than 12. The completion allowance is limited to R30 000 when the learnership is for a period of less than 24 full months. For longer agreements the completion allowance is R30 000 multiplied by the number of consecutive 12-month periods covered by the agreement. The allowances are increased to R50 000 for learnerships entered into with employees having a disability.
Legal and Policy Division
SOUTH AFRICAN REVENUE SERVICE
Date of 1st issue: Date of 2nd issue: Date of 3rd issue: Date of 4th issue: Date of 5th issue:
5 March 2004 30 March 2007 28 January 2010 10 June 2011
30 January 2015
Annexure – The law Section 12H
12H Additional deduction in respect of learnership agreements.—(1) For the purposes of this section—
‘associated institution’, in relation to any single employer, means—
(a) where the employer is a company, any other company which is associated with the employer company by reason
of the fact that both companies are managed or controlled directly or indirectly by substantially the samepersons;
(b) where the employer is not a company, any company which is managed or controlled directly or indirectly by the
employer or by any partnership of which the employer is a member; or
(c) any fund established solely or mainly for providing bene ts for employees or former employees of the employer
or for employees or former employees of the employer and any company which is in terms of paragraph (a) or (b) an associated institution in relation to the employer, but excluding any fund established by a trade union or industrial council and any fund established for postgraduate research otherwise than out of moneys provided by the employer or by any associated institution in relation to the employer;
‘employer’ means—
(a) where only one employer is party to a registered learnership agreement, that employer; or
(b) in the case where more than one employer is a party to a registered learnership agreement, the employer which is
identi ed in that agreement as the leademployer;
‘learner’ means a learner as de ned in section 1 of the Skills Development Act,1998; ‘registered learnership agreement’ means a learnership agreement thatis—
(a) (b)
registered in accordance with the Skills Development Act, 1998; and entered into between a learner and an employer before 1 October2016;
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saIT comPendIum oF Tax LegIsLaTIon VoLume 2