CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 7 Result: R Contributions made by AG to ABC Health SA (R5 000 × 12) 60 000 MTC calculation Taxpayer and one dependant 606 Plus: R204 for every additional dependant (R204 × two children) 408 Total monthly credit 1 014 The MTC to be deducted from normal tax payable by AG for the 2018 year of assessment: (R1 014 × 12) 12 168 R12 168 represents the maximum MTC rebate for the year of assessment. Example 7 – Effect of MTC on tax payable Facts: For the 2018 year of assessment, LM (aged 47) paid R1 700 per month in medical scheme contributions and did not incur any other medical expenses during the year. LM's taxable income for the 2018 year of assessment is R120 000. LM is the main member of the medical scheme, and has one dependant registered on that scheme. Result: R MTC calculation Total contributions: R1 700 × 12 20 400 MTC: Member and one dependant = R606 per month, thus: R606 × 12 months = R7 272 maximum rebate for the year of assessment Calculation of net normal tax Normal tax on R120 000 (at 18%) 21 600 Less: Primary rebate (13 635) 7 965 Less: MTC (7 272) Net normal tax due 693 The MTC is a rebate against taxes payable and is, as a result, limited to the tax payable before the offset of employees' tax and provisional tax. The MTC can accordingly not create a refund prior to the offset of employees' tax and provisional tax, nor can any excess be carried forward to the next year of assessment. Example 8 – MTC may not create a refund Facts: For the 2018 year of assessment, BA (aged 52) paid R2 500 per month for 10 months in medical scheme contributions and did not incur any other medical expenses during the year. BA's taxable income is R95 000 for the 2018 year of assessment. BA is the main member of the medical scheme, and has two dependants registered on that scheme.

• 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