Description
The Income Tax Act, 1962, provides for circumstances in which an
application may be made for a tax directive.
One of these is where a director’s expected remuneration for the
current year is less than the remuneration received for the
previous year and will lead to an overpayment of PAYE, which will
result in hardship.
Where the company (employer) has not determined the remuneration
for the preceding year of assessment, it must request the local
branch office of the South African Revenue Service (SARS) to
determine the amount of remuneration which the director is deemed
to have received.
[Top]
Steps to follow
When applying for a tax directive, make sure your tax affairs are
in order—SARS will not normally issue a tax directive if you have
any outstanding tax returns or payments.
The following minimum information must be provided on the
application form:
- The last known remuneration received (including allowances,
e.g. 50% of the travelling allowance, but excluding lump sums and
gains made by directors or employees in respect of rights to
acquire marketable securities.
- The year of assessment in which the remuneration was
received.
- The number of completed months for which the last known
remuneration was received.
- The estimated or actual remuneration for the current year.
(This information must be supplied when the reason for the
directive is hardship.)
- The application must contain reasons for the directive. Support
these by documentation, e.g. interim financial statements and
minutes of meetings held by directors, which indicate that
remuneration to be paid to directors will be less than the
remuneration for the previous year of assessment.
[Top]
Legal framework
Income Tax Act, 1962 (Act 58 of 1962)
[Top]
Service standard
There is no specific time-frame for processing the application.
[Top]
Cost
The service is free.
[Top]
Forms to complete
(Forms are provided in PDF format. To open PDF documents, you need to
have Adobe Acrobat Reader 4 or higher installed on
your computer.)
Application for a tax directive - directors'
remuneration, IRP3(d)
[Top]
Contact details |