FUNDAMENTALS OF
SOUTH AFRICAN
INCOME TAX
2022
TWELFTH EDITION
Edited by
PROF. SHAUN PARSONS
RILEY CARPENTER
PROF. CRAIG WEST
© Copyright 2022
Hedron Tax Consulting & Publishing CC
ISBN No. 978-1-991222-52-7
Income Tax Act reproduced under Government
Printer's Copyright Authority 7743 of 30/10/1981
H & H Publications
HEDRON TAX CONSULTING AND PUBLISHING CC
CK 1987/029323/23
P. O. Box 6923, Roggebaai, 8012. Republic of South Africa
Tel: (021) 762-0113 i Fax: (086) 607-5531
www.hedron.co.za
, 2021 Edition
The expected date of publication for the 2021 edition is 15 January 2021.
Contact us at www.hedron.co.za or or by post, telephone or fax at
Hedron CC, P. O. Box 6923, Roggebaai, 8012
,Fundamentals of South African Income Tax
1.1. ORIGINS OF FUNDAMENTALS
This is the 12th edition of Fundamentals of South African Income Tax (Fundamentals). The book originally
grew out of the recognition of the need for a textbook aimed specifically at foundational tax knowledge. At
this foundational level it would be more appropriate to remove some of the complexity of the tax legislation
and provide users with a basic understanding of the mechanics of the core tax computations. Once users
establish a base of tax knowledge they will be better prepared to utilise the full-version “Notes on South
African Income Tax” in more advanced tax courses.
1.2. SOURCE MATERIAL
While attempting to remain true to the source material, drawn largely from Notes on South African Income
Tax, much of the complexity in the selected topics has been removed and the structure is less traditional than
in the full version. Fundamentals continues to develop over time as legislation changes and as the curricula of
the foundational tax courses that this book serves develop.
1.3. THE APPROACH OF THIS BOOK
Our experience has been that when students are immediately confronted with large volumes of detailed tax
theory, they struggle to understand how the theory fits into the end goal of preparing a tax computation. The
approach to this book is to develop a foundation of simple application upon which the complexities of taxation
can be built at a later stage. The approach is predominantly practical rather than theoretical. Our hope is that
after working through this book students will be able to deal with the basic tax returns of a variety of taxpayers
and will then be ready to progress to the theoretical concepts underpinning the system of taxation in South
Africa.
The book begins with the concept of the individual employee as a taxpayer. It is anticipated that this represents
the most likely first exposure students may have to tax. Here we also cover the limited deductions available to
employees.
The next few chapters expand the scope of sources of income to include the operating of a business and the
earning of investment income with their associated tax implications. This also creates the opportunity to make
the transition to companies as taxpayers. At this stage we introduce the concepts of exempt income and specific
deductions.
Once the major taxpayers and their sources of income have been established, we begin to explore capital
allowances and capital gains tax. These concepts are sufficiently demanding to require their own chapters,
although, once again, the focus is on developing a basic understanding of the core principles. The book
concludes with chapters on specific topics appropriate in a foundational tax course.
This book has been based on taxpayers with 2022 years of assessment. Amendments pertaining to 2023 years
of assessment are therefore not fully considered in this edition.
We welcome comments as to the effectiveness of this book as a teaching resource and other feedback.
,
SOUTH AFRICAN
INCOME TAX
2022
TWELFTH EDITION
Edited by
PROF. SHAUN PARSONS
RILEY CARPENTER
PROF. CRAIG WEST
© Copyright 2022
Hedron Tax Consulting & Publishing CC
ISBN No. 978-1-991222-52-7
Income Tax Act reproduced under Government
Printer's Copyright Authority 7743 of 30/10/1981
H & H Publications
HEDRON TAX CONSULTING AND PUBLISHING CC
CK 1987/029323/23
P. O. Box 6923, Roggebaai, 8012. Republic of South Africa
Tel: (021) 762-0113 i Fax: (086) 607-5531
www.hedron.co.za
, 2021 Edition
The expected date of publication for the 2021 edition is 15 January 2021.
Contact us at www.hedron.co.za or or by post, telephone or fax at
Hedron CC, P. O. Box 6923, Roggebaai, 8012
,Fundamentals of South African Income Tax
1.1. ORIGINS OF FUNDAMENTALS
This is the 12th edition of Fundamentals of South African Income Tax (Fundamentals). The book originally
grew out of the recognition of the need for a textbook aimed specifically at foundational tax knowledge. At
this foundational level it would be more appropriate to remove some of the complexity of the tax legislation
and provide users with a basic understanding of the mechanics of the core tax computations. Once users
establish a base of tax knowledge they will be better prepared to utilise the full-version “Notes on South
African Income Tax” in more advanced tax courses.
1.2. SOURCE MATERIAL
While attempting to remain true to the source material, drawn largely from Notes on South African Income
Tax, much of the complexity in the selected topics has been removed and the structure is less traditional than
in the full version. Fundamentals continues to develop over time as legislation changes and as the curricula of
the foundational tax courses that this book serves develop.
1.3. THE APPROACH OF THIS BOOK
Our experience has been that when students are immediately confronted with large volumes of detailed tax
theory, they struggle to understand how the theory fits into the end goal of preparing a tax computation. The
approach to this book is to develop a foundation of simple application upon which the complexities of taxation
can be built at a later stage. The approach is predominantly practical rather than theoretical. Our hope is that
after working through this book students will be able to deal with the basic tax returns of a variety of taxpayers
and will then be ready to progress to the theoretical concepts underpinning the system of taxation in South
Africa.
The book begins with the concept of the individual employee as a taxpayer. It is anticipated that this represents
the most likely first exposure students may have to tax. Here we also cover the limited deductions available to
employees.
The next few chapters expand the scope of sources of income to include the operating of a business and the
earning of investment income with their associated tax implications. This also creates the opportunity to make
the transition to companies as taxpayers. At this stage we introduce the concepts of exempt income and specific
deductions.
Once the major taxpayers and their sources of income have been established, we begin to explore capital
allowances and capital gains tax. These concepts are sufficiently demanding to require their own chapters,
although, once again, the focus is on developing a basic understanding of the core principles. The book
concludes with chapters on specific topics appropriate in a foundational tax course.
This book has been based on taxpayers with 2022 years of assessment. Amendments pertaining to 2023 years
of assessment are therefore not fully considered in this edition.
We welcome comments as to the effectiveness of this book as a teaching resource and other feedback.
,
