The taxpayer is an individual who invoices his client through his CC. The client withholds PAYE at a rate of 28% when making payment of the client's invoice. This is because the company is considered to be a Personal Service Provider Company. When the ind
Important:
This answer is based on tax law for the tax year ending 28 February 2018.
Answer:
The matter is being dealt with in paragraph 11 of the Fourth Schedule to the Income Tax Act.
Paragraph 11(a) allows SARS, having regard to the circumstances of the case, to issue a directive to an employer authorising that employer –
(i) to refrain from deducting or withholding any amount … by way of employees' tax from any remuneration due to any employee of that employer; or
(ii) to deduct or withhold by way of employees' tax from any remuneration …, a specified amount or an amount to be determined in accordance with a specified rate or scale,
… where the remuneration is paid or payable to a personal service provider and that directive must be complied with.
Paragraph 11(b) allows SARS, having regard to the circumstances of the case, to issue a directive to an employer which is a private company, authorising that employer –
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to refrain from paying any amount under paragraph 11C(2); or
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to pay under that paragraph a specified amount or an amount to be determined in accordance with a specified rate or scale,
in order to alleviate hardship to an employer which is a private company and the employer must comply with that directive.
Sub-paragraph (a) is the one relevant to your request.