CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 26 Result: R Total contributions 42 000,00 MTC calculation MTC: (R606 + R204) × 12 9 720,00 Calculation of tax liability Taxable income 298 000,00 Normal tax on R298 000 (as per tax tables) 62 362,60 Less: Primary rebate (13 635,00) 48 727,60 Less: MTC (9 720,00) 39 007,60 Less: AMTC (1 271,50) Net normal tax 37 736,10 Less: Employees' tax (39 004,00) Due to X (1 267,90) Calculation of AMTC A = R42 000 (contributions to a medical aid or fund) B = R9 720 (MTC) C = R24 316 (qualifying medical expenses of R14 866 + R9 450) D = R298 000 (represents taxable income - excluding any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit and severance benefit) Formula to calculate AMTC: AMTC = 25% × {[A – (4 × B)] + C] – (7,5% × D)} = 25% × {[R42 000 – (4 × R9 720)] + R24 316] – (7,5% × R298 000)} = 25% × [(R42 000 – R38 880) + R24 316] – R22 350] = 25% × ( R27 436 – R22 350) = 25% × R5 086 = R1 271,50 4. How to claim the medical scheme fees tax credit and additional medical expenses tax credit 4.1 Persons registered for income tax The following documentation must be retained for audit purposes when an MTC or AMTC is claimed for a year of assessment: • Proof of contributions paid to a registered medical scheme or to any other funds registered under similar provisions in the laws of any other country. Contributions paid to a registered medical scheme will be reflected on the medical aid certificate. • A statement from the medical scheme indicating the total amount of claims submitted to the fund that were not refunded to the taxpayer or paid by the scheme to the

• Cover
• Preface
• Glossary
• 1. Background
• 2. Part A – Section 6A rebate (medical scheme fees tax credit)
• 2.1 Qualifying persons for whom contributions may be claimed
• 2.1.1 Meaning of a "dependant"
• 2.2 Person paying the contributions
• 2.2.1 Contributions paid by the taxpayer
• 2.2.2 Qualifying contributions
• 2.3 Medical scheme fees tax credit
• 2.4 Amount of medical scheme fees tax credit to be deducted from tax due
• 3. Part B – Section 6B rebate (additional medical expenses tax credit)
• 3.1 Background
• 3.2 Qualifying persons for whom expenses may be claimed
• 3.2.1 The meaning of "dependant"
• 3.2.2 The meaning of "spouse"
• 3.2.3 The meaning of "child" for purposes of the additional medical expenses tax credit
• 3.3 Qualifying medical expenses
• 3.3.1 Expenditure incurred inside the Republic
• 3.3.2 Expenditure incurred outside the Republic
• 3.3.3 Qualifying disability expenditure
• (a) Prescribed diagnostic criteria for a disability
• (b) Confirmation of disability (ITR-DD form)
• 3.3.4 Expenses relating to a physical impairment
• 3.4 Timing of claim for qualifying medical expenses
• 3.5 Contributions and qualifying medical expenses deemed to be paid by the taxpayer
• 3.6 Amount of additional medical expenses tax credit to be deducted from tax due
• 3.6.1 Taxpayers aged 65 years and older
• 3.6.2 Taxpayers with a disability
• 3.6.3 Taxpayers under the age of 65 without a disability
• 4. How to claim the medical scheme fees tax credit and additional medical expenses tax credit
• 4.1 Persons registered for income tax
• 4.2 Persons not registered for income tax
• 5. How to object to the disallowance of an medical scheme fees tax credit or additional medical expenses tax credit
• 6. Other information
• 6.1 Relief of customs and excise duty on a motor vehicle adapted for a physically disabled person
• Annexure A – The law
• Annexure B – The prescribed list of expenditure