The Minister of Finance has approved the publication of the revised daily allowances for purposes of determining the taxable portion of a subsistence allowance paid to an employee who is required to spend at least one night away on business and where the employee does not retain proof of his or her expenses.
Where this is the case, the following amounts will be deemed to have been actually expended by the employee for tax purposes:-
These amounts apply in respect of the full year of assessment ending 29 February 2004, i.e. retroactively from 1 March 2003.
Employees who received subsistence allowances for travel during the period 1 March 2003 up to the date of this notice, which exceeded the previous daily amounts (i.e. R53 or R173, as the case may be), must retain proof of their subsistence expenses during that period. The reason for this is that these allowances may be reflected on their IRP5's as taxable allowances as employers were not aware of the increase in the deemed daily amounts at the time of allocating those allowances as taxable. When preparing their tax returns, employees may then claim either their actual expenses or, if they prefer, the increased deemed daily amounts against the allowances which have been reflected as taxable. Where an employee elects to claim the deemed daily amounts, he/she need not retain proof of expenses but must keep a record of the number of days he/she was required to spend away from his/her usual place of residence.
The Government Notice giving effect to the revised daily subsistence allowances will be published in Gazette No. 25106 of 27 June 2003.
These regulations have also been published on the SARS Website http://www.sars.gov.za and can be accessed under Legislation / Regulations and Government Notices / Income Tax / Regulations.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE