CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 5 Result: The total monthly contributions of R24 000 for the relevant year of assessment are regarded as qualifying contributions. Contributions paid by the taxpayer 7 to any other fund registered under similar provisions in the laws of any other country, may also be taken into account. 8 Certain medical-related arrangements or products are marketed by entities that are not regulated by the MS Act, for example, long-term insurers. These products do not qualify for an MTC in South Africa; similarly if a foreign product is marketed by an entity that is not regulated under legislation that is similar to the MS Act, it will not quality for an MTC. A South African employer that makes contributions to a foreign medical scheme in respect of an employee has the obligation to determine whether the legislation which governs such foreign scheme is similar to the provisions of the MS Act and whether such contributions will therefore qualify for an MTC. Example 4 – Contributions to a foreign medical scheme Facts: AC lives in South Africa and is liable to tax in South Africa. AC paid monthly contributions of R2 000 to British Health Corporation. The contributions are for AC, AC's spouse and their children. They are all considered dependants under the rules of the medical scheme. British Health Corporation is not registered as a medical scheme under the MS Act, but is registered under similar laws in the United Kingdom. Result: The total monthly contributions of R24 000 for the year of assessment are regarded as qualifying contributions. Contributions made by a taxpayer to any registered medical scheme in respect of him- or herself and any dependant 9 will be a qualifying contribution. It is not a requirement that the taxpayer's spouse or dependant, for example, be admitted as a dependant on the taxpayer's medical scheme in order for the taxpayer to qualify for an MTC. The requirement is that the taxpayer's spouse or dependant merely be admitted on any registered medical scheme. Example 5 – Contributions to different medical schemes Facts: GE paid monthly contributions of R2 500 to ABC Health SA, a registered medical scheme. The contributions are for himself, his spouse and their two children. They are all considered dependants under the rules of the medical scheme. GE also paid monthly contributions of R1 500 to Tip Top Health (a registered medical scheme) for his mother who is dependent on GE for family care and support, and is a dependant as defined in section 1 of the MS Act. 7 See 4 of this guide for practical application. 8 Section 6A(2)(a)(ii). 9 Section 1 of the MS Act.

• 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