HomeHome SearchSearch MenuMenu Our productsOur products

Do you know whether your business is excluded from Section 23(m) of the Income Tax Act?

by , 22 April 2013
No one likes to hand more money over to SARS than they have to. That's why Section 23(m) on the Income Tax Act is such a firm favourite with companies and business owners alike. It deals with the types of business-related expenses, losses and allowances you're able to deduct to pay less tax to SARS. But here's the thing that many people don't realise, not everyone can use Section 23(m) to their advantage...

'Most businesses literally donate cash to SARS because they don't know what tax deductions are available to them,' says the Practical Tax Loose Leaf.

That's where Section 23(m) can help.

After all, it stipulates a number of tax deductions you're entitled to – including some frequently forgotten ones like:

  • Claiming the costs incurred in developing your next 'big idea';
  • Repair and maintenance allowances;
  • Home office expenses; and
  • The tax benefits of spending a night away from home.

But not everyone can claim tax deductions under Section 23(m).

These five businesses are excluded from Section 23(m)

If you render services as one of the following, says the Practical Tax Loose Leaf, Section 23(m) won't apply to you:

  1. A labour broker who isn't in possession of a valid IRP30 exemption certificate;
  2. A personal service company;
  3. A personal service trust;
  4. A natural person who normally earns mainly commission attributable to your personal sales or turnover;
  5. Or an independent contractor, such as a sole proprietor.

In each case, many of the allowances and deductions stipulated by the Income Tax Act, aren't applicable to you and you won't be able to claim tax back on your expenses.

Bottom line: By understanding whether or not Section 23(m) refers to your business enterprises, you'll know exactly what you can and can't claim from SARS when it comes to allowances and deductions.



Related articles




Related articles



Related Products



Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>