An excerpt from Minister Gordhan’s budget speech around the proposed fringe benefit tax exemption thresholds for bursaries and when these might become effective.
“To support skills development, government proposes to increase the fringe benefit tax exemption thresholds for bursaries provided to employees or their relatives. The income eligibility threshold for employees to access the relief will be increased from R250 000 to R400 000. The value of qualifying bursaries will be increased from R10 000 to R15 000 for National Qualifications Framework levels 1 to 4, and from R30 000 to R40 000 for levels 5 to 10.”
No effective date of implementation has however been announced.
The bulk of the proposals made in Minister Gordhan’s budget speech have been “ratified” in the relative legislation. The legislation does not contain any amendments to the exemption relative to the fringe benefit tax exemption thresholds for bursaries. As such, the proposal is not dealt with in the legislation on the table and can therefore only be dealt with the Taxation Laws Amendment Bill that will be released probably in September/ October this year. In this Bill, SARS/ National Treasury can decide on the effective date – 1 March 2017- or they can potentially backdate to 1 March 2016. There is also the third possibility that they may drop the proposal and not legislate it.
Accordingly, the existing thresholds remain in force until such time as the proposals are given effect by the appropriate legislation. We will keep you informed of any developments in this regard.
This article was written by Profmark and is courtesy of our partner Moore Stephens: http://southafrica.moorestephens.com/Home.aspx
You can download the original article here.