If an individual earns interest income, annuity from retirement fund and commission, would the taxpayer be able to claim expenditure on commission if commission is less than 50% of total income? Would interest income be considered passive income and could
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
The relevant law is found in section 23(m) and reads as follows:
“…whose remuneration is normally derived mainly in the form of commissions based on his or her sales or the turnover attributable to him or her…”
The relevant words are “whose remuneration”. As the interest is not remuneration, it must not be included in the amount when this test is applied.
The practice generally prevailing is that the “term “remuneration” in this context is not necessarily as defined in the Fourth Schedule, that is. it is a general reference to a reward or pay received in return for services rendered or work done.”