close
Share with your friends

South Africa: Tax considerations for business expenses related to coronavirus (COVID-19)

South Africa: Tax considerations for business expenses

Actions taken by businesses in response to the coronavirus (COVID-19) can result in additional expenses—for which companies need to note possible tax considerations.

1000

Related content

For instance, COVID-19 can have implications on employment and the ability to claim a tax deduction in respect of “retrenchment costs” (redundancies) depends on a number of factors, such as:

  • Whether the retrenchments are as a result of the business closing down and ceasing to trade or whether the retrenchments are a consequence of the need to downsize operations
  • Whether the employer is under a legal obligation to pay the retrenchment costs or is making the payment ex gratia
  • If there is no legal obligation to pay retrenchment costs, whether there is an established practice of making such payments to employees

There are also tax considerations for employers that provide employees with paid leave, concerning whether items of expenditure relating to overhead costs are capital in nature, and for taxpayers that invest in technology that may warrant a shorter write-off period.

Read a March 2020 report [PDF 364 KB] prepared by the KPMG member firm in South Africa

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal