In this article, we’ll explain the functional of A Comprehensive List of Tax-Deductible Business Expenses in South Africa According to the current economic climate in South Africa, it’s essential to reduce business expenses wherever possible. SME’s businesses must ensure they claim all the tax-deductible business expenses they’re entitled to on their tax returns.

What Refers to tax-deductible business expenses?

According to SARS, tax-deductible business expenses are any expenses incurred in the operation of a business. For example, material and equipment costs for the office are considered a business expense. It’s imperative to keep records of these purchases.

In South Africa, whether you’re registered as a company or a sole proprietor, you can claim business expenses on your taxes. Freelancers who work from home can also claim valid expenses.

Business expenses you can claim as a commission earner

SARS allows commission earners to deduct all commission-related expenses against his or her commission income. This includes expenses such as telephone usage, petrol, accommodation, wear and tear, and entertainment.

You’ll need to prove that these expenses were directly related to your commission work. SARS has been known to flag these claims due to previous abuse of the system, especially for more vague claims like entertainment.

Here is a checklist/List of Tax-deductible Business expenses in South Africa

 Day-to-day business expenses

These are general day-to-day office or business expenses, including items like stationery, petrol, and internet. These expenses should all fall into one of the following categories:

  • material and equipment costs
  • employee costs and administration costs
  • office rental costs
  • office supplies
  • phone and internet costs
  • travel and transport, including business vehicle running costs
  • uniforms and PPE
  • wholesale purchase costs for inventory
  • financial charges (such as bank fees)
  • electricity, water, and other utilities
  • security costs
  • cleaning costs
  • legal fees
  • insurance fees
  • marketing, advertising, and promotional expenses.

Capital expenses

These are general day-to-day office or business expenses, including items like stationery, petrol, and internet. These expenses should all fall into one of the following categories:

  • equipment and machinery
  • business vehicles
  • renovation costs
  • hardware, such as computers signage.
Business Start-up
  • Office Suppliers
  • Business cards
  • Insurance fees
  • Website development
  • Loan fees
Employee cost
  • Staff training
  • Online courses
  • Workshops
  • Salaries

Document Required

Expenses                                                                                                           Monthly Voices receipts

Office rental                                                                                                       Medial aid tax original invoice

Office suppliers                                                                                                  Calculation of wear and tear

Medical costs                                                                                                     Email receipts

Depreciation on business assists

Travel

Rideshare costs e.g.(Uber)                                                                             Email receipt, Bank statement

Bank chargers

Conclusion

So those are some of the common List of Tax-Deductible Business Expenses in South Africa. To avoid missing the deadlines listed above (and even those not listed in this article), I highly recommend you hire a reputable accounting firm that will significantly save you the stress, time, and money you could otherwise incur over time.

 

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