What you need to know about tax-free company transport

The provision gave rise to confusion, particularly in cases where employers did not provide the transport service directlyGetting to and from work can be a challenge for millions of South Africans, given the cost, risk and unpredictability of public transport. As a result, many companies offer transport services to their employees.

However, the provision gave rise to confusion, particularly in cases where employers did not provide the transport service directly but contracted a third party to do so. Under the new rule the no-value provision applies if the transport service is outsourced to a specific transport service provider and meets certain conditions. Among these is that the service is provided exclusively to employees along predetermined routes; employees are not allowed to request the service on an ad hoc basis; and the contract for transportation is between the employer and the transport service provider — employees may not be party to the contract.

“The dilemma, especially in cities, is that employees live far from each other and far from work,” said Jaco la Grange, chair of the South African SA Institute of Tax Professionals’ personal tax committee. “The practice has been to transport employees from the office to a specific drop-off area such as a bus depot or a taxi rank.”

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

BUSINESS MAVERICK : The economic cost of tax, our low savings rate and red tapeFor years, policymakers have worried that our savings rate is too low. International comparisons often show that South Africa has one of the lowest savings rates in the world. These numbers generate widespread anxiety, and for good reason. Savings are the key to capital formation, and every economic theory — even Marxism — teaches that capital formation is necessary to raise wages and stimulate long-term economic growth. Why have our tax policies become opposed to it?
Source: dailymaverick - 🏆 3. / 84 Read more »

Tanzania tax row: Acacia Mining hits back at parent company BarrickInternecine fighting takes its toll as each company wants to assert its right to reach a negotiated settlement with the east African country's tax authorities
Source: BDliveSA - 🏆 12. / 63 Read more »