Just a quick query, we are trying to claim for entertainment expenses for our client, unfortunately under “other” expenses we cannot load anything there as it is greyed out. Please see attached a copy of what is loaded onto SARS for her. When I phoned SAR
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
The current practice generally prevailing is this regard reads as follows (see Interpretation note 13):
“The term “mainly” is interpreted to mean more than 50% of the taxpayer’s gross remuneration. This means that the total income of the taxpayer (including 100% of all allowances) must be compared to his or her commission income.”
The term “mainly” comes from section 23(m) of the Income Tax Act and the subsection applies to you case. If the allowance is added the 50% threshold is exceeded. Note however, that the test for “normally” is a subjective test and each case must be evaluated on its own merits, with due regard to the taxpayer’s previous and future years of assessment.
The deduction can therefore not be made, unless the taxpayer can proof that the commission normally exceeded the 50% threshold.