Page 12 - Nexia Cape Town 2018 TG Digital

DEDUCTIONS

Contributions to pension, provident and retirement annuity funds
With effect 1 March 2016 the tax deduction for contributions made to pension
funds, provident funds and retirement annuity funds is significantly amended�
Please refer to previous year’s tax guides for the tax treatment before 1 March
2016� From 1 March 2016 onwards, the tax deduction calculation for the three
different funds, pension, provident and retirement annuity funds will be identical�
The deduction will be
limited to: 27,5% of the greater of Limit of
R350 000 per year
‘taxable income’ (excluding any lump ‘remuneration’ (excluding
sum benefits or severance benefits) any lump sum benefits or
but before the donations deduction severance benefits)

The above deduction is however limited to taxable income before this deduction
and before any taxable capital gain�
Excess contributions not allowed as deductions are carried forward to the
following year of assessment� Contributions made by employers on behalf of
employees would be a taxable fringe benefit in the hands of the employees
but will also be regarded as a contribution made by the employee, therefore
deductible in the hands of the employee subject to the above limitations�
Medical and disability expenses
All taxpayers are entitled to a monthly “tax rebate” (i�e� credit) in respect of any
medical scheme contributions made for the benefit of themselves and their
dependants as follows:
2017 2018 2019
Taxpayer R286 R303 R310
First dependant R286 R303 R310
Per additional dependant R192 R204 R209

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