Page 365 - SAIT Compendium 2016 Volume1

Seventh Schedule INCOME TAX ACT 58 OF 1962 Seventh Schedule
(b) in any other case, an amount calculated at the prevailing rate per day at which such accommodation could normally be let to any person who is not an employee of the employer or of any associated institution in relation to the employer . [Item (b) amended by s. 59 (a) of Act 101 of 1990 and by s. 51 (1) (b) of Act 28 of 1997 and substituted by s. 55 of Act 30
of 2000.]
(5) Where, by reason of the situation, nature or condition of the accommodation or any other factor, the Commissioner is satis ed that the rental value of such accommodation is less than the rental value thereof determined in accordance with the formula contemplated in subparagraph (3) (a) or the rental value determinable under subparagraph (4), he may determine such rental value at such lower amount as to him appears fair and reasonable.
[Sub-para. (5) substituted by s. 55 (1) (d) of Act 30 of 1998.]
(6) Where any employee has been provided by his employer with residential accommodation consisting of two or
more residential units situated at different places which the employee is entitled to occupy from time to time while performing his duties the cash equivalent of the value of the bene t of such units which shall be included in the gross income of the employee shall be the value of the unit with the highest rental value determined under subparagraph (2) over the full period during which the employee was entitled to occupy more than one unit.
[Sub-para. (6) substituted by s. 51 (1) (c) of Act 28 of 1997.]
(7) No rental value shall be placed under this paragraph on any accommodation away from an employee’s usual place
of residence in the Republic provided by his employer while such employee is absent from his usual place of residence in the Republic for the purposes of performing the duties of his or her employment: Provided that the preceding provisions of this subparagraph shall not apply in respect of any residential unit referred to in subparagraph (6).
[Sub-para. (7) amended by s. 68 (1) (a) of Act 35 of 2007.]
(7A) Subject to subparagraph (7B), no rental value shall be placed under this paragraph on any accommodation
provided by an employer to an employee away from such employee’s usual place of residence outside the Republic—
(a) for a period not exceeding 2 years from the date of arrival of that employee in the Republic, for the purposes of
performing the duties of his or her employment; or
(b) if that accommodation is provided to that employee during the year of assessment and that employee is physically
present in the Republic for a period of less than 90 days in that year.
[Sub-para. (7A) inserted by s. 68 (1) (b) of Act 35 of 2007 and substituted by s. 48 (1) (b) of Act 3 of 2008.]
(7B) The provisions of subparagraph (7A) (a) do not apply—
(i) if that employee was present in the Republic for a period exceeding 90 days during the year of assessment immediately preceding the date of arrival referred to in subparagraph (7A); or
(ii) to the extent that the cash equivalent of the value of the taxable bene t derived from the occupation of the residential accommodation exceeds an amount equal to R25 000 multiplied by the number of months during which
subparagraph (7A) applies.
[Item (ii) amended by s. 1 (2) (c) of Act 3 of 2008.] [Sub-para. (7B) inserted by s. 48 (1) (b) of Act 3 of 2008.]
(8) For employees’ tax purposes an appropriate portion of the cash equivalent referred to in subparagraph (2) shall be apportioned to each period during the year of assessment in respect of which any cash remuneration is paid or becomes payable by the employer to the employee.
(9) Where the employee has been provided with residential accommodation by his employer or any associated institution in relation to the employer and such employee has an interest in the accommodation in question, as contemplated in subparagraph (10), and the accommodation has been let to the employer or to any associated institution in relation to the employer, the said rental shall for the purposes of this Act (excluding this subparagraph) be deemed not to have been received by or to have accrued to the employee or any connected person in relation to the employee. [Sub-para. (9) added by s. 31 (b) of Act 96 of 1985 and substituted by s. 34 (1) (b) of Act 65 of 1986, by s. 29 (b) of Act 85
of 1987, by s. 59 (b) of Act 101 of 1990, by s. 51 (1) (d) of Act 28 of 1997 and by s. 55 (1) (e) of Act 30 of 1998.]
(10) For the purposes of subparagraphs (3B) and (9), an employee shall be deemed to have an interest in accommodation
if—
(a) such accommodation is owned by the employee or a connected person in relation to such employee;
(b) any increase in the value of the accommodation in any manner whatsoever, whether directly or indirectly, accrues
for the bene t of the employee or a connected person in relation to such employee; or
(c) such employee or a connected person in relation to such employee, has a right to acquire the accommodation from
his employer.
[Sub-para. (10) added by s. 59 (c) of Act 101 of 1990, substituted by s. 51 (1) (d) of Act 28 of 1997 and amended by s. 55 (1) (f) of Act 30 of 1998.]
FREE OR CHEAP SERVICES (paras. 10–10A)
10. (1) The cash equivalent of the value of any taxable bene t derived from the rendering of a service to any employee as contemplated in paragraph 2 (e) shall be—
(a) in the case of any travel facility granted by an employer who is engaged in the business of conveying passengers for
reward by sea or by air to enable any employee or any relative of such employee to travel to any destination outside the Republic for his or her private or domestic purposes, an amount equal to the lowest fare payable by a passenger utilising such facility (had he or she paid the full fare), less the amount of any consideration given by the employee or his or her relative in respect of such facility: Provided that for the purposes hereof a forward journey and a return journey shall be regarded as one journey; or
[Item (a) amended by s. 30 (a) of Act 9 of 2006.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1 357
INCOME TAX ACT – SCHEDULES