It is no secret that many a taxpayer wishes to minimise their tax liability in a given year of assessment, and tends to get very creative with doing so.
However, it is just as widely known that SARS is very attentive to the tax deductions that are made in submissions and returns, and will not allow just any item to be utilised in reducing taxable income unless allowed by tax legislation.
This course aims to address those items that are allowed to be deducted for income tax purposes, as well as those that may not be.
This session will cover the following:
• The general deduction formula as set out in Section 11 of the Income Tax Act, and the most contended elements thereof in dispute between taxpayers and SARS
• Specific deductions granted under this and other sections of the Act
o Legal expenses
o Repairs and maintenance
o Bad and doubtful debts
o Learnership deductions
o Donations
o Credit agreements and debtor allowances
o Future contract costs
o Assessed losses
• Prohibited and limited deductions (including prepaid expenditure and the limitation on excessive interest)
• This session excludes detailed coverage of capital allowances, which is covered in the second part of this series.
All taxpayers wishing to claim tax deductions lawfully, and tax professionals managing their tax affairs. Auditors might also benefit from this course as it will enable them to understand the working of tax deductions that they might need to consider during an audit.
