• Service: Tax, International Executive Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/5/2013

South Africa - Proposed tax treatment of employee benefits 

August 5: Proposals in South Africa concerning the tax rules with respect to certain employee provisions, if enacted, would:
  • Impose tax on dividends paid on unvested shares as remuneration to the employee, not as exempt dividends
  • Repeal the deduction for premiums paid to income protection policies (but proceeds such as disability annuity would be exempt from tax
  • Allow charitable donations in excess of 10% of taxable income to be carried forward to future years, and not “lost” as non-deductible items
  • Treat employer contributions to all pension funds as a taxable fringe benefit.
  • Provide new fringe benefit valuation rules for for employer contributions to defined benefit retirement plans
  • Extend mandatory retirement annuity requirements to Provident Funds, effective 1 March 2015
  • Extend fringe benefit concession treatment for transfers of low cost housing to employees

Read a July 2013 report prepared by the KPMG member firm in South Africa: Employees’ Tax Highlight stemming from the 2013 Tax Amendments

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