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Moneyweb writes that the lack of adequate public transport has forced many companies to provide transport services to their employees – either free or for less than the actual cost of getting them to and back from work.
In terms of the Income Tax Act, this service is considered a taxable (fringe) benefit in the hands of the employee, but no value may be placed on the benefit if certain requirements are met. However, there has been uncertainty as to how the South African Revenue Service (Sars) applies the no-value provision in the Act. Sars has now published two binding rulings to set out how it intends on dealing with the issue. The first was a private ruling published in January. In the second general ruling, published in March, Sars has given clarity on the meaning of transporting employees from their ‘homes’ to their workplace. Jaco la Grange of Deloitte comments that employers can now offer the benefit tax free to their employees, without having to transport them to and from work. The transport can now be to any transport node en route to their home or workplace such as the Gautrain station, bus stops or taxi ranks.
- Read this report by Amanda Visser in full at Moneyweb
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