South Africa: Qualifying medical expenses for tax credit
South Africa: Qualifying medical expenses, tax credit
The South African Revenue Service (SARS) released a list of specific qualifying medical expenses for application by individual taxpayers with disabilities or physical impairment from 1 March 2020.
Historically, taxpayers were able to claim medical expenses (within certain parameters) as a tax deduction in their tax returns (form ITR12) in order to determine their net taxable income. It was a so-called “above the line’’ tax deduction. However, since 2012, South Africa has applied a tax credit system whereby relief for medical expenditure is granted as a reduction when determining the tax payable. While medical tax credits are applied in respect of qualifying contributions to a medical scheme, an additional medical tax credit applies in respect of other qualifying medical expenses. Qualifying medical expenses are any amounts that are paid by a taxpayer during the relevant tax year (such as costs incurred in relation to a duly registered medical practitioner, dentist, etc.)
The SARS list of specific qualifying medical expenses are amounts paid in relation to a physical impairment or disability of the taxpayer or his/her dependants for application from 1 March 2020 (the 2021 South African tax year).
The prescribed of list of expenditures, effective 1 March 2020, is very specific and covers the following types of expenses:
- Personal care attendant expenses
- Travel and transportation
- Insurance, maintenance, repairs and supplies
- Aids and other devices
- Continence products
- Service animals
- Alterations or modifications to assets acquired or to be acquired
Read a February 2020 report [PDF 195 KB] prepared by the KPMG member firm in South Africa
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