TAX3702 PRE-EXAM QUICK NOTES
1. Net normal tax liability
a. Draw a timeline of how long the taxpayer was employed for
b. Blue highlight = remuneration
Salary Full
Commission Full
Travel allowance:
Travel allowance received (Amount x
number of months)
Compare deemed and actual expenses to
determine which is higher: XXX
Deemed:
Fixed cost/total km
Fuel per table
Maintenance per table
Total deemed expenditure/km
Actual:
Depreciation: Cost of vehicle/7
Running costs
Other costs
Total actual expenditure/total
km travelled = Total actual
expenditure/km
Multiply highest of deemed and actual
expenditure by business km (XXX)
Subtract private costs covered by the
employee (XXX)
Cash equivalent of fringe benefit XXX
Right of use of motor vehicle:
Cost of motor vehicle(excl VAT) x 1.14 x
85% (if purchased more than 12 months
ago) x 3.25% (if there is a maintenance
plan) or 3.5% (no maintenance plan) x n
months XXX
(Less) Business portion (RXXX x
business km/total km) (XXX)
(Less) Private costs covered by the
employee (wrt fuel, even if they give us
an amount, it is irrelevant. ALWAYS USE
THE AMOUNT IN THE TABLE) (XXX)
Cash equivalent of benefit XXX
Insurance policy:
-Not employer owned policy (Full)
-Employer owned policy
-Pure risk policy
*Amounts received from any of these
, policies are exempt (s10(1)(gI)
Low interest loan:
(Loan amount x (REPO+1%= official rate of
interest) – employee interest rate%) x n/12
months XXX
Housing acquired from employer at cost less
than MV:
(MV- Purchase price) XXX
Housing subsidy (Loan amount x (Bank rate% -
Employer rate%) x n/12 months XXX
Long service award: XXX
First R5000 exemption (5000) XXX - 5000
Medical expense fringe
Foreign dividends XXX
Foreign dividend partial exemption
26/41 (XXX)
Total XXX
Foreign interest Full
Local interest XXX
Local interest exemption (23800)
Total XXX -
23800
Subtotal XXX
(less) Deductions
Retirement annuity fund/ Pension fund/
Provident fund contributions:
% limit: 27.5% of remuneration or
27.5% of taxable income or (XXX)
R350 000
Taxable income XXX
Normal tax per table XXX
(less) Primary rebate
<65 years old: (13500)
65<n<75 years old: (20907)
>75 years old: (23373)
(Less) Medical scheme fees tax credit ((R286 +
R286+ R192+…+R192)x n months taxpayer has
contributed to medical scheme) (XXX)
(Less) Additional qualifying medical expenses
tax credit:
Contributions by taxpayer XXX
Contributions by employer XXX
Total contributions: XXX
Less: 3 (disability) or 4 (no disability) x
Medical scheme fees tax credit as
calculated above (XXX)
Excess contributions: XXX
Add: additional qualifying contributions XXX
1. Net normal tax liability
a. Draw a timeline of how long the taxpayer was employed for
b. Blue highlight = remuneration
Salary Full
Commission Full
Travel allowance:
Travel allowance received (Amount x
number of months)
Compare deemed and actual expenses to
determine which is higher: XXX
Deemed:
Fixed cost/total km
Fuel per table
Maintenance per table
Total deemed expenditure/km
Actual:
Depreciation: Cost of vehicle/7
Running costs
Other costs
Total actual expenditure/total
km travelled = Total actual
expenditure/km
Multiply highest of deemed and actual
expenditure by business km (XXX)
Subtract private costs covered by the
employee (XXX)
Cash equivalent of fringe benefit XXX
Right of use of motor vehicle:
Cost of motor vehicle(excl VAT) x 1.14 x
85% (if purchased more than 12 months
ago) x 3.25% (if there is a maintenance
plan) or 3.5% (no maintenance plan) x n
months XXX
(Less) Business portion (RXXX x
business km/total km) (XXX)
(Less) Private costs covered by the
employee (wrt fuel, even if they give us
an amount, it is irrelevant. ALWAYS USE
THE AMOUNT IN THE TABLE) (XXX)
Cash equivalent of benefit XXX
Insurance policy:
-Not employer owned policy (Full)
-Employer owned policy
-Pure risk policy
*Amounts received from any of these
, policies are exempt (s10(1)(gI)
Low interest loan:
(Loan amount x (REPO+1%= official rate of
interest) – employee interest rate%) x n/12
months XXX
Housing acquired from employer at cost less
than MV:
(MV- Purchase price) XXX
Housing subsidy (Loan amount x (Bank rate% -
Employer rate%) x n/12 months XXX
Long service award: XXX
First R5000 exemption (5000) XXX - 5000
Medical expense fringe
Foreign dividends XXX
Foreign dividend partial exemption
26/41 (XXX)
Total XXX
Foreign interest Full
Local interest XXX
Local interest exemption (23800)
Total XXX -
23800
Subtotal XXX
(less) Deductions
Retirement annuity fund/ Pension fund/
Provident fund contributions:
% limit: 27.5% of remuneration or
27.5% of taxable income or (XXX)
R350 000
Taxable income XXX
Normal tax per table XXX
(less) Primary rebate
<65 years old: (13500)
65<n<75 years old: (20907)
>75 years old: (23373)
(Less) Medical scheme fees tax credit ((R286 +
R286+ R192+…+R192)x n months taxpayer has
contributed to medical scheme) (XXX)
(Less) Additional qualifying medical expenses
tax credit:
Contributions by taxpayer XXX
Contributions by employer XXX
Total contributions: XXX
Less: 3 (disability) or 4 (no disability) x
Medical scheme fees tax credit as
calculated above (XXX)
Excess contributions: XXX
Add: additional qualifying contributions XXX
