When it comes to the corporate return of a company,
there might be possible relief for companies in terms of the Income Tax Act.
With a variety of relief available for corporates, many companies often miss out on some of these reliefs, which may constitute a deduction in your return.
What are some of the allowable deductions for almost every company?
- Claiming the cost on patents, trademarks and designs
A claim can be made if a patent (such as a design, copyright or trademark) has been acquired. The claim can be made if it is used in the production of your income. Says Octagon Chartered Accountants: “What companies need to keep in mind with regards to this claim is that the claim is only applicable if the patent was bought, not if it was designed by you personally for your own company.”
If the cost of the patent is more than R5000, the following can be claimed:
- 5% on patents and trademarks; and
- 10% on designs.
- Learnership Allowances can result in a double allowance“When it comes to allowances, these can be claimed on the commencement and completion of the learnership agreement if you are an employer. The allowance can be claimed if the learner employee is a party to a registered learnership agreement,” says the advises the charted accounting and tax advisory firm.
In terms of Section 12H, which has been proposed to be extended, an employer can claim the following allowances:
- Commencement Allowance:
- R30 000 for a period of 12 months (year), or proportionally if less than 12 months.
- R50 000 for a period of 12 months (year), or proportionally if less than 12 months, it the employee is disabled.
- Completion Allowance:
- Additional R30 000, if the learnership agreement was less than 24 months and it has been successfully completed by the employee.
- Additional R50 000, if the learnership agreement was less than 24 months and it has been successfully completed by the employee, and the employee is disabled.
- If the employee completes a learneship allowance in excess of 24 months, the following allowances will apply:
- R30 000 multiplied by each successful 12-month period completed (E.g. R30 000 x 3, if three years were completed).
- R50 000 (Disabled) multiplied by each successful 12-month period completed.
- The years must be consecutive years.
With possible increase in taxes in the year ahead, it is important for companies to keep these tax reliefs in mind. Don’t miss out on possible rebates and deductions – if you are unsure whether what your company is doing qualifies, contact us today.