Chapter 1.2-1.8

Question 1

Gross income

Answer 1

All amounts received in respect of service rendered or to be rendered, or in respect of employment

Question 2

“In respect of “ implies

Answer 2

That the reason for the payment to the person must be because of the services he/she renders or will render.

Question 3

Fringe benefits income includes

Answer 3

1. Use of an employer-owned car
2. Use of residential accommodation
3. Schooling for children paid by employer
4. Low interest loans

Question 4

Define Fringe benefit

Answer 4

Benefits provided by employer to employees, other than cash . An employee is taxed on the Value of the benefit he receives.

Question 5

Interpretation note 14 states that an allowance is

Answer 5

Typically an amount of money granted by an employer to an employee where the employer is certain that the employee will incur business related expenditure on behalf of the employer, but where the employee isn’t obliged to prove to the employer for the expenditure

Question 6

Where is the amount is an advance

Answer 6

The employee has to prove the business expenditures and refund any excess to the employer

Question 7

Where the amount is an reimbursement

Answer 7

The employee has already incurred the business expenditure, paid for it from his own pocket, and then recovers the expense from the employer. Proof has to be provided