Libertad condicional: una exploración inicial

(i) No taxable benefit arises where the employee is provided with accommodation away from his/her normal place of residence for purposes of performing his/her duties.

(ii) The benefit is taxed on the basis of the employee’s level of remuneration and not on the actual value of the housing provided.

(iii) The value of accommodation provided to expatriate employees is taxable to the extent that it exceeds an amount equal to R25 000 multiplied by the number of months for which the benefit will apply. (Para 9(7B)(ii)(B) of Seventh Schedule). The employee is exempt from fringe benefits for a maximum of two years from date of first arrival in the RSA. Fringe benefits tax will apply where the employee was present in the RSA for a period exceeding 90 days during the year of assessment prior to arrival.

(iv) The taxable benefit that is derived, may be the rental value of such accommodation calculated in terms of the formula in (v) below, less any rental actually paid by the employee for the accommodation or any rental consideration paid by the employee for household goods supplied and any charge made to the employee by the employer in respect of power or fuel provided with the accommodation.

(v) The rental value to be placed on any accommodation provided to an employee is calculated in terms of the formula: (A - B) x 100 C x 12 D

“A” = A remuneration factor representing

remuneration derived by the employee from his/her employer during the preceding year of assessment, in terms of which the remuneration received is deemed to be grossed up to an annual amount where the employee worked for the current employer for part of the previous year, or is an amount equal to the employees monthly salary divided by the amount of days in that month and multiplied by 365 where the employee worked for a different employer in the previous year.

“Remuneration” includes directors’ fees but excludes (amongst others):

 the benefit derived from residential

accommodation;

 the benefit derived from the private use of any motor vehicle;

“B” = an abatement of R59 750 (from 1 March 2012).

 The abatement is not available where:  the employer is a private company and

the employee or his/her spouse controls the company or is one of the persons controlling the company.

 the employee, his/her spouse or minor child owns or has some right to acquire the property.

“C” = a factor which determines the value to be placed on the accommodation and varies

depending on the size of the accommodation and facilities supplied:

 17, if less than four rooms, or more than four, but unfurnished and without power;  18, if four or more rooms with either

furnishing or power supplied;

 19, if four or more rooms with both furnishing and power supplied.

“D” = the number of months in the year of

assessment during which the employee was entitled to occupation of the accommodation. (vi) Where the employee is provided with two or more residential

units the cash equivalent will be that of the unit with the highest rental value over the full period during which the employee was entitled to occupy more than one unit.

(vii) Where accommodation which is provided as a benefit to an employee is not owned by the employer or an associated person in relation to the employer, or where the employee has an interest in the particular accommodation, said employee will be taxed on the amount equal to the greater of:

o the value determined or

o total amount of rentals and other expenditure paid by

employer. Rental payable is not taxable in the hands of the employee or connected person in order to avoid double taxation.

An employee will be deemed to have an interest in the accommodation if:

 such accommodation is owned by the employee, his/her spouse or child, or by a company in which the employee, his/her spouse or child has a substantial shareholding, or by a trust in which the employee, his/her spouse or child is a beneficiary; or

 any increase in the value of the accommodation in any manner whatsoever, directly or indirectly, accrues for the benefit of the employee, his/her spouse or child; or

 such employee, or a connected person in relation to such employee, has a right to acquire the accommodation from the employer.

The following criteria apply:

 The formula above will not apply, where it is customary for an employer in the industry concerned to provide free or subsidised accommodation to its employees, and

 It is necessary for the particular employer to provide free or subsidised accommodation to its employees:

o for the proper performance of their duties; or

o as a result of the frequent movement of employees; or

o as a result of the lack of employer-owned

accommodation.

 The benefit is provided solely for bona fide business purposes.

The formula method in (v) above will, however, still apply.

6.10 Subsidies - Paragraph 2 and 12 of the Seventh

Schedule

(i) Taxable benefit arises when an employer pays a subsidy in respect of capital or interest payments due by the employee on any loan.

(ii) Cash equivalent of the taxable benefit in all cases is equal to the full amount of the subsidy.

(iii) Where a financial institution or other body grants a loan to an employee of any employer at a low rate of interest subject to an additional payment by the employer to compensate the financial institution for the consequent loss of interest income, the additional payment will be regarded as a taxable subsidy in the hands of the employee, if the payment by the employer - the amount calculated using the official rate of interest. If it does not exceed this amount, the benefit will be taxed as a low-interest loan.