CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 6 Result: The total monthly contributions of R48 000, that is, R30 000 (R2 500 × 12) + R18 000 (R1 500 × 12), are regarded as qualifying contributions in GE's hands in that applicable year of assessment. 2.3 Medical scheme fees tax credit The MTC is set at a fixed amount per month. Since the MTC is a "rebate" and not a "deduction", it is not refundable and cannot exceed the amount of normal tax payable. An employer that effects payment of the medical scheme fees is obliged to take into account the MTC when calculating the employees' tax to be deducted or withheld from employees' remuneration. 10 This is usually carried out using the various payroll systems. The MTC may be taken into account at the option of the employer where the employer does not effect payment of the medical scheme fees, and if proof of payment of those fees has been furnished to the employer. Taxpayers who have not had their MTC taken into account may claim the applicable rebate by submitting an annual ITR12 income tax return to take advantage of the credit. 2.4 Amount of medical scheme fees tax credit to be deducted from tax due The MTC for the year of assessment commencing on or after 1 March 2017 is as follows: 11 • R303 in respect of benefits to the taxpayer; • R606 in respect of benefits to the taxpayer and one dependant; or • R606 in respect of benefits to the taxpayer and one dependant, plus R204 for every additional dependant, 12 for each month in that year of assessment for which contributions are paid. The MTC reflected above will apply to qualifying taxpayers irrespective of their age and whether they are disabled or not. Example 6 – Determination of MTC Facts: AG (aged 45) paid contributions of R5 000 per month to ABC Health SA, a registered medical scheme, during the 2018 year of assessment. The contributions are for AG, AG's spouse and their two children. They are all considered dependants under the rules of the medical scheme. 10 Paragraph 9(6) of the Fourth Schedule to the Act. 11 Section 6A(2)(b), read with section 5 of the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2017. 12 Section 6A(2)(b).

• 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