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Here are eight fringe benefits you must pay output tax on or face 200% SARS penalties

by , 13 November 2014
You know you have to collect Vat on any supplies you sell and declare it to SARS as output tax. But did you know you have to collect Vat on fringe benefits you give your employees as well?

That's right!

If you don't give SARS this output tax, it will charge you 200% penalties.

To help you avoid this, we're revealing the eight fringe benefits you must collect Vat on...

 

Pay SARS output tax on these eight fringe benefits so you don't incur 200% penalties

 
1. Rewarding employees for a great service. (E.g. the top salesman of the year wins an all-expenses-paid trip for himself and a partner.)
 
2. Goods/services given to relatives of employees. (E.g. instead of paying Mr Q a bonus, his company pays for his wife to accompany him on a business trip to Durban.)
 
3. Purchase of an asset at less than actual value. (E.g. You allocate Miss K a company vehicle. After three years, the company says she can buy the vehicle at 75% less than its market value. )
 
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4. Right to use an asset. (E.g. employees being allowed to take home and use the company's computers).
 
5. Free meals and refreshments. (E.g. a company gives its staff breakfast and lunch for free.)
 
6. Free or cheap services. (E.g. a cosmetics and skin care group gives their staff free facials.)
 
7. Medical costs incurred by the employer, (E.g. the company pays for medication for the staff, such as antiretroviral drugs.)
 
8. Company cars.
 
If you give your employees any of these benefits, you have to work out the Vat as well as the normal fringe benefit tax on them. Then you have to pay that Vat to SARS as output tax.
 
If you need more information on how to do this, check out the Practical Tax Loose Leaf Service.
 


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