New Anti-Avoidance Measures

Jul 25, 2014 | 2012 - 2014, News

New anti-avoidance measure for employee-share incentive schemes. The treasury has recognised that employee-share incentive schemes have created “disguised” salaries for employees that are tax free. How? Equity shares are held on behalf of employees, with the sole intention of generating dividends for employees, without the employees taking ownership of the shares, thereby creating tax-free dividends. A new proviso, inserted into Section 10(1)(k) of the Income Tax Act 58 of 1962 has rendered dividends received by or accrued to an employee by virtue of their employment, taxable.