Short Course in Personal Income Tax within South Africa

Name: Short Course in Personal Income Tax within South Africa
Rating: 4.4 (46 reviews)

Personal Income Tax: Income; Deductions; Salaried Employees; Tax Implication of a Natural Person; Capital Gains Tax

Created byThe Tax Faculty (South Africa)

Last updated 7/2024

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What you'll learn

Demonstrate an understanding of when income received by an individual taxpayer should be taxed and when deductions are claimable.
Differentiate between fringe benefits and allowances and the inclusion in a taxpayer’s taxable income
Calculate the taxable income of an individual taxpayer within a South African context
Demonstrate an understanding of the process of submitting final tax returns to the South African Receiver of Revenue.

Course content

19 sections • 78 lectures • 13h 5m total length

Introduction to Personal Income Tax0:46
As tax is both a legal requirement and social responsibility, it is critical that all individuals have a solid grasp of the principles of taxation and their related obligations. During this course, you will develop the foundational principles of personal income tax and cover cover practical issues impacting individual taxes such Airbnb/rental income, home office expenses, medical tax credits and travel allowances. Upon completing this short course, you will be empowered to manage your personal tax affairs.
Hanri Van Der Merwe, a senior Tax lecturer at the Tax Faculty, has created an introductory recording on the aspects that you will learn on this course.

The following Modules are included in the course:
Introduction to tax.
Income.
Deductions.
Salaried employees.
Tax Implication for Natural Persons.
Introduction to Capital gains Tax.
The modules are divided into topics. Each topic will have a downloadable knowledge guide, additional reading material and links to short lecture videos that are not more than twenty minutes in length.
The study guides will reference to certain Acts and SARS guides.
The Tax Faculty has teamed up with LexisNexis to bring you applicable Tax related legislation.
Introduction video2:02
Acquire practical skills to manage your own tax affairs, covering rental income, home office expenses, medical tax credits, and travel allowances, and file your tax return.

Topic 1: Introduction to Taxes in South Africa1:16
Video 1: What is Tax?10:50
Discover what tax is, who pays it, and why governments levy it. Explore direct and indirect taxes, and key types like personal income tax, VAT, corporate tax, and exemptions.
Video 2: Who Are The Role Players?5:53
Explain the main role players in South Africa's tax system, including the Income Tax Act, SARS, the commissioner, and the definition of a person for taxpayers.
Video 3: Difference between Direct & Indirect Tax3:25
Video 4: Type of taxes13:03
Explore the range of South Africa taxes, from residence-based normal tax and pay-as-you-earn prepayments to capital gains tax, withholding taxes, and turnover tax for microbusinesses, plus vat and indirect levies.
Video 5: How are the rules set?9:39
Video 6: How should the rules be applied?5:28
Apply the rules by consulting the consolidated act, regulations, court cases, binding rulings, interpretation notes, and guides to determine the correct tax interpretation in line with SARS.
Video 7: How is tax calculated?18:20
Video 8: How is information presented?7:42

Gross Income - Introduction0:41
Gross Income Video 1 - Contextualising the definition8:40
Gross Income Video 2 - Year of assessment8:52
Gross Income Video 3 - Total Amount in Cash or Otherwise8:24
Gross Income Video 4 - Received by or Accrued to17:09
Determine gross income as the earlier of receipt or accrual, guided by unconditional entitlement. Apply case law to decide if amounts accrue when earned, and avoid double taxation.
Gross Income Video 5: Capital Nature25:28
Gross Income Video 6: Resident vs Non Resident12:05
Explore how residency determines tax treatment of gross income in South Africa, applying ordinary residence and physical presence tests to distinguish residents from non-residents and worldwide versus South African income.
Quiz: Gross Income

Introduction to Special Inclusions0:27
Special rules exist that override the gross income definition as discussed in topic 1. These special rules are called “special inclusions” and are included in the gross income of a natural person. These special inclusions can be found in section 1 of the Income Tax Act alongside the gross income definition.

The second part of the gross income definition from paragraph (a) to (n), list a number of specific inclusions. They are receipts and accruals (amounts) that will be specifically included in gross income.

Reading Material:
Work through the Knowledge Guide: Special Inclusion
Video Time:
Watch the Knowledge Video: Special inclusions (11 min)
Self - Assessment Knowledge Quiz:
Complete Quiz: Special Inclusion
Video: Special Inclusions10:41
Special rules exist that override the gross income definition as discussed in topic 1. These special rules are called “special inclusions” and are included in the gross income of a natural person. These special inclusions can be found in section 1 of the Income Tax Act alongside the gross income definition.

The second part of the gross income definition from paragraph (a) to (n), list a number of specific inclusions. They are receipts and accruals (amounts) that will be specifically included in gross income.

Reading Material:
Work through the Knowledge Guide: Special Inclusion
Video Time:
Watch the Knowledge Video: Special inclusions (11 min)
Self - Assessment Knowledge Quiz:
Complete Quiz 2: Special Inclusion
Quiz: Special Inclusions

Topic 3: Exempt Income - Introduction0:24
In Topic 3 you will be introduced to the concept of “exempt income”. These are amounts that constitute gross income and have, therefore, been included in the calculation of gross income, but should not be taxed and therefore "deducted" as exempt.

Reading Material:
Work through the Knowledge Guide: Exempt Income
Video Time:
Watch the Knowledge Video: Contextualising Exempt Income (3 Min)
Watch the Knowledge Video: Exempt Taxpayer (6 Min)
Watch the Knowledge Video: Exempt Income Stream (23 Min)
Watch the Knowledge Video: Exempt Income For non-residents (5 Min)
Self - Assessment Knowledge Quiz:
Complete Quiz 3: Exempt Income
Video 1: Contextualising Exempt Income3:04
Video 2 : Exempt Taxpayer6:48
Identify exempt income and exempt taxpayers under section ten, and learn to include the amount in gross income before applying full or partial exemptions that reduce tax liability.
Video 3 : Exempt Income Stream23:20
Explore exempt income streams and how they reduce gross income, including pensions, bursaries, relocation benefits, fringe benefits, and foreign dividends in South Africa.
Video 4 : Exempt Income For non-residents6:21
Explore exempt income for non-residents in South Africa, including South African-sourced income, interest, royalties, and public service exemptions, with double-tax relief and residency considerations.
Quiz: Exempt Income

Introduction to the Practical Guide and Simulation0:37
The individual declares his or her taxable income to SARS annually on the ITR12 income tax return. The ITR12 return can be submitted electronically on eFiling, manually or the taxpayer can visit a SARS office and a SARS official will assist the taxpayer to complete the return electronically.
After submitting the ITR12 return to SARS, an assessment, called the ITA34 Assessment, will be issued by SARS based on the taxable income declared.
The due date for submission of income tax returns is published annually in the Government Gazette. eFiling is the quickest, easiest and most convenient way to submit the return and is the option recommended by SARS. If a taxpayer does not submit their return by the relevant deadline, they will be liable for an administrative penalty due to non-compliance.
This practical guide provides guidance for tax submissions by a taxpayer.

Reading Material:
Work through the Practical Guide: Income
Video 1: Income Self Guided Practical Simulation Activity Question47:59
Explore income tax concepts in a practical South African case study: identify gross income, special inclusions and exemptions, and complete a provisional tax calculation and RTR 12 return.
Video 2: Income Self Guided Practical Simulation Activity Question6:31
Explore how to structure tax solutions, include reasons and section references, compute gross income, apply exemptions, and prepare the tax return.

Introduction to Deductions0:56
The Act prescribes that taxpayers can make deductions to their income in order to determine their taxable income. Taxable income is the amount that remains after the deducting all allowable deductions and allowances from income. The main sections that deal with deductions in the Act are section 11 to section 18A, section 22 to section 24.
In this module, we will concentrate on the general deduction formula outlined in section 11(a). This section always has to be read and applied with section 23(g).

The Topics and subtopics in this module are:
Topic 1: The General Deduction Formula
Contextualising deductions
Expenditure and Losses
Actually incurred
Carrying on a trade
Year of assessment
In the production of income
Not of a capital nature

Topic 2: Specific and prohibited deductions

Specific and prohibited deductions

Work through the learning activities outlined in Topic 1: General Deductions and the associated quiz, Topic 2: Specific and Prohibited deductions and quiz and finally the practical guide and simulated return.

After studying this knowledge module, you will be able to:
Identify where the deductions would be included in the tax calculation framework.
Apply the qualifying criteria to determine whether an amount is deductible under the general deduction formula.
Explain how to treat expenses incurred before a taxpayer started to trade.
Identify where deductions are declared to SARS on the income tax return (ITR12).

Introduction to General Deductions0:54
At this point in your learning journey, you should understand that a person is taxed on his/her taxable income. You would also now have a broad understanding of which amounts are included in gross income and which items are regarded special inclusions, and exempt income.
We are sure you would now like to understand what amounts can be deducted from income to determine the person’s taxable income. Surely it would not be fair to tax a person on their full income and not recognise that there were certain expenses incurred in order to generate that income.
It is therefore logical that certain amounts (one of which is allowable deductions) should be deducted from income to determine taxable income.

Reading Material:
Work through the Knowledge Guide: The General Deduction Formula
Additional reading:
Home-Office-Expenses-Deductions

Video Time:
Watch the Knowledge Video 1: Contextualising deductions (10 Min)
Watch the Knowledge Video 2: Expenditure and losses (8 Min)
Watch the Knowledge Video 3: Actually incurred (17 Min)
Watch the Knowledge Video 4: Carrying on a trade (12 Min)
Watch the Knowledge Video 5: Year of assessment (9 Min)
Watch the Knowledge Video 6: In the production of income (30 Min)
Watch the Knowledge Video 7: Not of a capital nature (13 Min)
Self - Assessment Knowledge Quiz:
Complete the Quiz: Topic 1-The General Deduction Formula
Video 1: Contextualising Deductions9:58
Video 2: Expenditure and Losses8:23
Explore the general deduction formula and the first requirement: expenditure or losses as any outflow of resources. Learn how case law, notably the Jaffe case, guides applying this concept.
Video 3: Actually Incurred17:25
Understand when a cost is actually incurred under the general deduction formula, including timing, quantification, and liability, citing Section 24 M and cases like Edgars Stores and Golden Dumps.
Video 4: Carrying on a Trade12:04
Evaluate whether you are trading, including commencement, using the six requirements of the general deduction formula. Explore the trade definition, pre-trade expenses under section 11 capital A, and Burgess.
Video 5: Year of Assessment9:04
Claim deductions only when expenditures are actually incurred during the year of assessment, as timing determines eligibility and carryover is generally not allowed unless section 23 H applies to prepayments.
Video 6: In the Production of Income29:46
Explore the production of income within the general deduction formula, focusing on purpose, income as defined, exempt income, and capital nature, with practical case insights.
Video 7: Not of a Capital Nature12:34
Quiz: General Deductions

Introduction: Specific and Prohibited deductions0:17
In Topic 1, we investigated the general deduction formula. In Topic 2 we will look at specific deductions that will be allowed and also at certain deductions that will be prohibited. This overrules the general deduction formula.

Reading Material:
Work through the Knowledge Guide: Specific and Prohibited Deductions

Video Time:
Watch the Knowledge Video: Specific and Prohibited Deductions (15 Min)

Self - Assessment Knowledge Quiz:
Self-Assessment Knowledge Quiz: Specific And Prohibited Deductions
Topic 2: Specific and Prohibited deductions12:29
Learn how section 23 prohibits certain deductions, overriding the general deduction formula. See practical examples on home office apportionment, main commission considerations, non-resident tax rules, exempt income, and entertainment deductions.
Quiz: Specific and Prohibited deductions

Requirements

Learners must have digital and numeracy literacy, with a basic accounting understanding.
Equipment required is a Laptop/PC with high speed internet with access to microsoft excel.

Description

As tax is both a legal requirement and social responsibility, it is critical that all individuals have a solid grasp of the principles of taxation and their related obligations. During this course, you will develop the foundational principles of personal income tax and cover cover practical issues impacting individual taxes such Airbnb/rental income, home office expenses, medical tax credits and travel allowances. Upon completing this short course, you will be empowered to manage your personal tax affairs

Key Objectives of this course:

Demonstrate an understanding of when income received by an individual taxpayer should be taxed and when deductions are claimable.
Differentiate between fringe benefits and allowances and the inclusion in a taxpayer’s taxable income.
Evaluate various options for the structuring of salary packages
Calculate the taxable income of an individual taxpayer.
Identify the various tax instruments and the structural elements of the Income Tax Act
Demonstrate an understanding of the basic mechanics of income tax Identify the different tax role players and the different tax types
Demonstrate a basic understanding of how income tax is calculated
Demonstrate an understanding of the process of submitting final tax returns
Demonstrate a basic understanding of what the Tax Administration Act is and what a tax practitioner is

Who this course is for:

Self-employed Individuals looking to maximize tax savings within South Africa.
Salaried employees who need to understand their income tax within South Africa
Retired individuals or anyone seeking to demystify the personal income tax process.

Short Course in Personal Income Tax within South Africa

What you'll learn

Explore related topics

Course content

Introduction to Personal Income Tax2 lectures • 3min

Module 1: Introduction to Taxes in South Africa9 lectures • 1hr 16min

Module 2: Income - Introduction1 lecture • 1min

Module 2: Income - Topic 1: Gross Income7 lectures • 1hr 21min

Module 2: Income - Topic 2: Special Inclusions2 lectures • 11min

Module 2: Income - Topic 3: Exempt Income5 lectures • 40min

Module 2: Income - Practical Guide and Simulation3 lectures • 55min

Module 3: Deductions - Introduction1 lecture • 1min

Module 3: Deductions - Topic 1: General Deductions8 lectures • 1hr 40min

Module 3: Deductions - Topic 2: Specific and Prohibited Deductions2 lectures • 13min

Requirements

Description

Who this course is for: