Exemption from submitting a return in respect of dividends

The Tax Administration Laws Amendment Act,  2016,  exempts  persons who derive a dividend from a tax free investment from submitting a return in respect of that dividend. Retirement funds are tax exempt savings vehicles, as is the case with tax free investments, and the Bill proposes that the exemption from submitting returns also be extended to retirement funds.

Spreading of tax deduction where annual cap of R350 000 applies

For purposes of calculating income tax, employees are able to deduct contributions (made by the  employee and/or employer) to pension, provident and retirement funds from their income in terms of section 11F of the Income Tax Act. The deduction is limited to the lesser of R350 000 or 27,5% of the greater of remuneration or taxable income. Where the annual cap of R350 000 applies, the Bill proposes to spread the deduction for employees’ tax purposes on a cumulative basis, i.e. over the tax year.