Betty Bookkeeper explains International income earned – Feb 2017

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Good day Betty,international income earned

I have a medical specialist as a client. He is a VAT registered vendor, in private practice, operating as a sole proprietor (in his own name).

He went to Canada for 2 months (from mid-Dec to mid Feb) to locum there as medical specialist at a hospital.  My question is twofold:

  1. Should the income he earned there (in Canadian Dollar) be added to his Output for VAT purposes?
  2. Should the income he earned there be included in his taxable income for provisional & annual income tax purposes?

I’ll appreciate your help a lot.

Louise

 

Hi Louise,

To answer your questions, please see my response below:

  1. This would be regarded as an exported service and should therefore be zero-rated for VAT purposes. It must be declared on his VAT return as a zero-rated supply but no VAT is payable on this (or rather VAT at 0% is payable which works out to the same thing)
  2. Yes, if he is a resident of South Africa then he must include his world-wide income in his taxable income and this must be factored in for provisional tax purposes as well as in his annual return. If any Canadian tax was paid or withheld he will be able to claim this as a foreign tax credit and this will be deducted (limited to the amount of SA tax payable on his foreign earnings) from his SA tax payable.

Hope that helps!

Don’t forget that I’m here to answer your questions about the ICBA, or just queries about your accounting at work. All you have to do is email me!

2017 South African Budget Speech Infographic

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There have certainly been mixed reviews after the National Budget Speech by Pravin Gordhan was announced last week as shown in the trending articles here and here. If you’d prefer to skip the debate and fast forward to the actual results, we have prepared the following 2017 South African Budget Speech Infographic below:

South African Budget Speech Infographic

Betty Bookkeeper explains which vehicle expenses can be claimed by a small business – Jan 2017

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Hi Betty 

I have a question regarding a small business, way too small for VAT.

They have one vehicle which is financed through Wesbank for which they pay monthly installments, over and above that the general repairs, maintenance and fuel costs.

Are the installments of the vehicle a business expense?

Is the fuel a business expense?

Are the repairs and maintenance a business expense?

Or when it comes to income tax, do they only get to use the AA rate per km to claim and none of the above?

Regards,
Caron

Hi Caron

You are able to claim the finances charges for the vehicle for the applicable tax year and you are able to claim depreciation on the vehicle at 20% per annum.

All other costs are calculated according to business kilometers traveled and these need to be documented and claimed in the form of a logbook. SARS has a logbook PDF available on their website to download. Remember to record your vehicle’s odometer reading on 1 March, i.e. on the first day of a tax year and make sure that you keep a logbook throughout the year. Without a logbook, you won’t be able to claim the cost of business travel against your travel allowance.

Hope that helps!

Don’t forget that I’m here to answer your questions about the ICBA, or just queries about your accounting at work. All you have to do is email me!

What is CPD and why is it important?

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Continuing Professional Development (CPD) is the process of tracking and documenting all the skills, knowledge and experience that you gain – formally and informally – as you work beyond your initial qualifications or training.

CPD is one of the requirements for renewing your ICBA membership, as on-going learning means you are keeping your industry knowledge current and relevant. Just like pilots, doctors and many other professionals, financial industry professionals need to keep their skills and knowledge up to date.

ICBA members must earn at least 20 CPD points every year. Each hour of learning you complete = 1 CPD point. These points are either:

Verifiable:

You have to prove your learning, e.g. provide an attendance certificate from seminars, workshops, etc. A minimum of 8 verifiable points is required (12 points minimum for Certified Technical Financial Accountant, Certified Technical Public Accountant, and Certified Financial Accountant members).

Non-verifiable:

Self-study that you keep a record of yourself, e.g. reading industry articles.

How to earn CPD points

  1. By attending workshops, seminars and conferences. Some of these are discounted for ICBA members. Click here to see a list of upcoming CPD events in the ICBA’s events calendar. You may find others that you’d prefer as well.
  2. By taking part in online webinars from the comfort of your own home or office. ICBA webinars are a free resource for ICBA members and interested parties. If you’re not able to attend a webinar, a recording can be sent to you. The next ICBA webinar dates will be communicated on our Facebook page. There are also other webinars offered by ICBA-endorsed CPD partners, which usually cost an average of R 250 each. View our events calendar for these upcoming webinars.
  3. Through self-study that includes reading relevant articles and professional journals. Even reading the ICBA newsletter counts as 1 CPD point! To subscribe to this newsletter, please email the ICBA with your ICBA reference number.

Earning CPD points is affordable

R 250 per hour but it could be less if planned carefully. Webinars tend to be the most affordable. Look out for the ICBA free webinars advertised in our newsletter and social media.

How to keep a record of your CPD points

ICBA members must use the ICBA CPD Tracking Form to record all their learning. You will need to show this form to the ICBA when you apply to renew your membership. Click here to download the ICBA CPD Tracking Form.

Make sure that you are familiar with all the ICBA’s CPD policies and procedures by reading through the ICBA CPD Policy. Click here to download this document.

“Success will not lower its standard to us. We must raise our standard to success.” – Rev. Randall R. McBride, Jr.

Got any questions about CPD? Contact the ICBA now.