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Guide on the Determination of Medical Tax Credits (Issue 7)

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The guide provides general guidelines to determine the medical fees tax credit and additional medical aid tax credit for income tax purposes. The guide includes the relevant definitions and formulas as well as detailed examples for purposes of the medical fees tax credit and additional medical aid tax credit calculation.

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BPR 242: Venture Capital Company Investment in Qualifying Companies

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  • This ruling determines –
    • Whether or not the investee is a “controlled group company” and that the shares purchased by the Applicant and Co-Investor is “equity shares”; and
    • The meaning of “hotel keeper” and the allowances that a hotel keeper may claim.
  • The Applicant and Co-Investor intends to invest in qualifying companies that will carry on the business of hotel keepers. They will each appoint a company (manager) to operate and manage their respective hotels. The manager will guarantee certain profit targets per annum.
  • The Applicant intends to exit this investment on or before the 5th year of the investment. The Co-Applicants will sell their respective hotels and distribute the proceeds to their shareholders.
  • The ruling held that each share of the Co-Applicants will constitute an “equity share” and therefore a “qualifying share” and that neither of the Co-Applicants will constitute a “controlled group company” for so long as they do not hold more than 70% of the total equity shares, irrespective of the fact that the Applicant may invest more than 70% of the aggregate share capital in each of the Co-Applicants in monetary terms.
  • The Applicant and Co-Investor can then get a deduction for the funds invested in the Co-Applicants in terms of the venture capital company regime.

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D v Commissioner, SARS (VAT 1390):

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“Whether the delivery of food orders to the taxpayer’s customers constitute a service supplied by it for consideration in the course, or furtherance, of its enterprise (and therefore whether same is within ambit of Value Added Tax Act, No. 89 of 1991). If so,  whether VAT falls to be paid on taxpayer’s delivery charges or whether same should be borne by taxpayer’s deliverers/ drivers (independent contractors).”

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