TWO (30 MARKS) The following information is relevant to Japie, a South African resident (aged 36), during the 2020 tax year. i. Japie received an annual salary of R 618 500 and a bonus of R 52 000 from his employer. ii. iii. iv. V. He received an annual travel allowance of R 65 000 and his employer expects that he will travel roughly the same business and private mileage. His vehicle cost R 235 000 and according to his logbook he travelled 7 164 km business travel. The readings per his logbook are as follows: Opening km: Closing km: 15,985 km 31,287 km His employer paid his monthly medical aid contributions of R 4 225. Japie is the main member of the medical aid and his wife and one child are dependents on his medical aid. Japie had a car accident and incurred medical expenses of R 91 368 that were not covered by his medical aid. Japie contributes R 225 000 to a retirement annuity fund - he does not belong to a pension fund. Japie has receipts for donations to Public Benefit Organizations totaling R 50 825. Japie received dividends from his JSE share portfolio of R 740 920 and dividends from UK shares of R 86 885. He earned interest of R 51 355 on a local money market account. On 30 September 2019 he and his wife jointly purchased a flat and immediately rented this out. They earned R 92 200 in rental income during the year and incurred the following expenses: Repairs and maintenance. Rates & electricity Bond repayments R 16,789 R 26,334 R 91,316 (including interest of R 84 327) They purchased furniture costing R 51 665 on 30 September 2019 to be used by the tenant in the flat. SARS accepts a 6 year write off period for furniture and fittings. Required: 2.1 Calculate the annual employee's tax that will be deducted by Japie's employer (assume that Japie has provided his employer with proof of his RAF contributions and donations). (12 marks) 2.2. Calculate Japie's tax owing to SARS or refund due by SARS for the year ended 29 February 2020 if employee's tax as per (a) above was paid by him during the year. (18 marks) End of Question Panero APPENDIX REQUIRED TABLES AND SCHEDULES TURNOVER TAX: YEARS OF ASSESSMENT ENDING BETWEEN 1 APRIL 2019 AND 31 MARCH 2020 TURNOVER RO to R 335 000 R 335 001 to R 500 R 500 001 to R 750 R 750 001 to R 1 000 RATES OF TAX Nil 1% of the amount over R 335 000 R 1650 +2% of the amount over R 500 000 R 6 650 +3% of the amount over R 750 000 SMALL BUSINESS CORPORATION TAX AS FROM 1 APRIL 2019: TAXABLE INCOME RATES OF TAX RO to R 79 000 Nil R 79 000 to R 365 000 R 365 001 to R 550 R 550 001 + 7% of the amount over R 79 000 R 20 020+21 % of the amount over R365 000 R 58 870 +28% of the amount over R 550 000 TAX RATES FOR INDIVIDUALS AND SPECIAL TRUSTS: 2019/2020 Taxable income RO to R 195 850 R 195 851 R 305 850 R 305 851 R 423 300 R 423 301 R 555 601 - R 555 600 R 708 310 R 708 311 R1 500 000 R 1 500 001 + Rates of Tax 18% of each R1 R 35 253+26% of the amount above R 195 850 R 63 853+31% of the amount above R 305 850 R 100 263+36% of the amount above R 423 300 R 147 891+39% of the amount above R 555 600 R 207 448 +41% of the amount above R 708 310 R 532 041+45% of the amount above R 1 500 000 Company Tax Rate (2019/2020) Trust Tax Rate (2019/2020) 28% 45% ADDITIONAL INFORMATION RELEVANT FOR THE 2019/20 TAX YEAR Tax rebates Persons under 65 Persons over 65 and under 75 Persons over 75 R 14 220 R 22 014 R 24 615 Interest exemption for interest received by resident individuals Persons under 65 Persons over 65 R 23 800 R 34 500 Medical aid tax credits R 310 each per month for the main member and the first dependant and an additional R 209 per month for each additional dependant. Capital gains Annual exclusion Individuals Individuals in the year of death Primary residence exclusion R 40 000 R 300 000 R 2 000 000 Estate duty S4A ABATEMENT (no pre-deceased spouse) R 3500 000 S4A ABATEMENT (pre-deceased spouse) R 7 000 000 less S4A abatement utilized by pre-deceased spouse Annual donation exemption Individuals Companies Rate per kilometre schedule R 100 000 R 10 000 Value of the vehicle (including VAT) (R) Fixed cost (Rp.a.) Fuel cost Maintenance (c/km) cost R0 - R85 000 28 352 95.7 34.4 R85 001 R170 000 50 631 106.8 43.1 R170 001 R255 000 72 983 116.0 47.5 R255 001 R340 000 92 683 124.8 51.9 R340 001 - R425 000 112 443 133.5 60.9 R425 001 R510 000 133 147 153.2 71.6 R 510 001 R 595 000 153 850 158.4 88.9 exceeding R 595 000 153 850 158.4 88.9