South Africa: Tax deduction for home office expenses, proposed revised guidance (COVID-19)

Revised guidance reflects the situation of a large number of taxpayers who have been working from home.

Taxpayers who have been working from home as a response to the coronavirus pandemic

The South African Revenue Service (SARS) released for public comment a revised draft Interpretation Note 28 to clarify the deductibility of home office expenses incurred by employed persons or persons holding an office.

The revised guidance reflects the situation of a large number of taxpayers who since March 2020 have been working from home as a response to the coronavirus (COVID-19) pandemic.

The prior version of the guidance included requirements that a home office had to be specifically equipped for the purposes of trade and regularly and exclusively used for trade purposes. The draft version of the revised guidance provides detail about the interpretation of the requirements and also provides a number of specific examples of what these requirements entail. The examples clarify that SARS intends to follow a very strict approach in interpretation, thereby greatly limiting the extent to which individuals will be able to claim the home office deduction. For example, a home office that is shared by two members of the same household, or that could be accessed by other members of the household (the example used is children being permitted to play in the room on a weekend because it is the only sunny room in the house) would fail the exclusivity test.
 

Read a May 2021 report [PDF 258 KB] prepared by the KPMG member firm in South Africa

 

 

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