Page 658 - SAIT Compendium 2016 Volume1

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EMPLOYMENT TAX INCENTIVE ACT 26 OF 2013 s 5
(b)
amount paid or payable to the qualifying employee by the employer in respect of a month; or
where an employer employs a qualifying employee for less than 160 hours in a month, means an amount calculated in terms of section 7 (5);
(ii) by not meeting such conditions as the Minister of Finance, after consultation with the Minister of Labour, may prescribe by regulation, including—
(aa) conditions based on requirements in respect of the training of employees; and
(bb) conditions based on the classi cation of trade in the most recent Standard Industrial Classi cation Code issued by Statistics South Africa.
4 Compliance with wage regulating measures
(1) An employer is not eligible to receive the employment tax incentive in respect of an employee in respect of a month if the wage paid to that employee in respect of that month is less than—
(a) the amount payable by virtue of a wage regulating measure applicable to that employer; or
(b) if the amount of the wage payable to an employee by an employer is not subject to any wage regulating measure—
(i) where the employee is employed for at least 160 hours in a month, the amount of R2 000 in respect of a month; or
[Sub-para. (i) substituted by s. 113 (1) of Act 43 of 2014 (date of commencement: 1 March 2015) and by s. 141 (1) of Taxation Laws Amendment Act, 2015 (‘more than’ replaced by ‘at least’) – date of commencement: 1 January 2016.]
(ii) where the employee is employed for less than 160 hours in a month, an amount that bears to the amount of R2 000 the same ratio as 160 hours bears to the number of hours that the employee was employed for by that employer in that month.
[Sub-para. (ii) substituted by s. 113 (1) of Act 43 of 2014 – date of commencement: 1 March 2015.]
(2) If an employer receives the employment tax incentive in respect of an employee despite not being eligible by reason of subsection (1), that employer must pay a penalty to the South African Revenue Service in an amount equal to 100 per cent of the employment tax incentive received in respect of that employee in respect of each month that the employer received the employment tax incentive.
(3) For the purposes of this section ‘wage regulating measure’ means—
(a) a collective agreement as contemplated in section 23
of the Labour Relations Act;
(b) a sectoral determination as contemplated in section
51 of the Basic Conditions of Employment Act, 1997
(Act 75 of 1997); or
(c) a binding bargaining council agreement as contem-
plated in section 31 of the Labour Relations Act, including where such agreement is extended by reason of a determination of the Minister of Labour in terms of section 32 of that Act.
5 Penalty and disquali cation in respect of displacement
(1) Where an employer is deemed to have displaced
an employee as contemplated in subsection (2), that employer—
(a) must pay a penalty to the South African Revenue
Service in an amount of R30 000 in respect of the
employee that is displaced; and
(b) may be disquali ed from receiving the employment
tax incentive by the Minister of Finance by notice in the Gazette after taking into account—
[De nition of ‘monthly remuneration’ substituted by s. 112 (1) of Act 43 of 2014 – date of commencement: 1 March 2015.]
‘qualifying employee’ means an employee contem- plated in section 6;
‘special economic zone’ means a special economic zone designated by the Minister of Trade and Industry pursuant to an Act of Parliament;
‘Tax Administration Act’ means the Tax Adminis- tration Act, 2011 (Act 28 of 2011);
‘wage’ means wage as de ned in section 1 of the Basic Conditions of Employment Act, 1997 (Act 75 of 1997).
(2) For the purposes of the de nition of ‘monthly remuneration’ in subsection (1), ‘remuneration’ has the meaning ascribed to it in paragraph (1) of the Fourth Schedule to the Income Tax Act.
(3) For the purposes of paragraph (c) of the de nition of ‘associated person’ in subsection (1) ‘relative’, in relation to any person, means the spouse of that person or anybody related to him or her or to his or her spouse within the third degree of consanguinity, or any spouse of anybody so related.
Part I Employment tax incentive (s 2)
2 Instituting of employment tax incentive
(1) An incentive, called the employment tax incentive, in order to encourage employment creation is hereby instituted.
(2) If an employer is eligible to receive the employment tax incentive in respect of a qualifying employee in respect of a month, that employer may reduce the employees’ tax payable by that employer in an amount determined in terms of section 7 or receive payment of an amount contemplated in section 10 (2), unless section 8 applies.
Part II
Eligible employers and qualifying employees (ss 3–6)
3 Eligible employers
An employer is eligible to receive the employment tax incentive if the employer—
(a) is registered for the purposes of the withholding and
payment of employees’ tax by virtue of paragraph 15
of the Fourth Schedule to the Income Tax Act; and
(b) is not—
(i) the government of the Republic in the national, provincial or local sphere;
(ii) a public entity that is listed in Schedule 2 or 3 to the Public Finance Management Act, 1999 (Act 1 of 1999), other than those public entities that the Minister of Finance may designate by notice in the Gazette on such conditions as the Minister of Finance may prescribe by regulation;
(iii) a municipal entity de ned in section 1 of the Local Government: Municipal Systems Act, 2000 (Act 32 of 2000); and
(c) is not disquali ed from receiving the incentive—
(i) by the Minister of Finance in accordance with section 5 (1) (b), due to the displacement of an
employee by virtue of section 5 (2); or
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SAIT CompendIum oF TAx LegISLATIon VoLume 1