Good news for employers who offer transport service to employees
A lack of adequate public transport has forced many companies to provide transport services to their employees — either free or for less than the actual cost of getting them to and back from work. In terms of the Income Tax Act, this service is considered a taxable (fringe) benefit in the hands of the employee, but no value may be placed on the benefit if certain requirements are met. However, there has been uncertainty as to how the South African Revenue Service (SARS) applies the no-value provision in the act. To give clarity and certainty, SARS has published two binding rulings this year to set out how it intends dealing with the issue. Binding private or general rulings clarify how the SARS commissioner would interpret and apply the provisions of the tax laws relating to a specific proposed transaction.
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