HomeHome SearchSearch MenuMenu Our productsOur products

Here's how to legally claim tax deductions on legal expenses

by , 13 June 2014
If Oscar Pistorius's trail has taught us anything, it's that lawyers cost a fortune. If a legal battle goes on for a long time, the lawyers alone could bankrupt your company.

But there's a ray of hope and it comes from SARS. While Pistorius may not be able to claim any deductions for the services of Barry Roux, your company could.

There are certain legal expenses SARS will let you claim as tax deductions. Just ensure you claim the right expenses or you'll face a penalty instead of a deduction...

*********** Reader's choice  ***************
Legally pay less tax

The dos of claiming tax deductions on legal expenses 

According to the Practical Tax Loose Leaf, there are seven specific legal expenses you can claim company tax deductions on. They are:
1. Your lawyer's fees;
2. Any money you paid while getting evidence or expert advice;
3. Court fees;
4. Your witnesses' fees or expenses;
5. Taxing fees;
6. The count officials fees and expenses; and
7. Other litigation expenses. 
These are the legal expenses section 11(c) of the Income Tax Act says you can claim as deductions. But there are some don'ts when it comes to claiming a deduction on your legal expenses too...
*********** Advertisement ************
Stop forking over thousands of unnecessary cash to SARS!
Be one of the first in the country to get access to the information that'll make sure you pay the least tax possible...
You can legally save your company thousands of rands in taxes on forgotten fringe benefits.

The don'ts of claiming a tax deduction on legal expenses

If you want to claim legal expenses back as a deduction on your company's income tax, you must ensure they're not:
1. Capital in nature;
2. From a claim against you, where you had to pay damages or compensation;
3. From a claim you've made for money that won't be income; and
4. From any disagreement or legal action that comes from either of the two situations we've mentioned above. 
If you stick to these dos and don'ts, you'll be able to concentrate on winning your legal battle instead of paying for it. 

Related articles

Related articles

Watch And Learn

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 >>>