Fringe Benefits

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Here is the advice our panel of experts gave about Fringe Benefots to a subscriber:

Fringe benefits

Question:

Do club subscriptions amount to a taxable fringe benefit?

It is quite common for companies to pay for club subscriptions on behalf of certain of their sales staff. Whilst it is often a condition of employment that a sales person belong to a club as a means of generating new business, I am concerned that SARS may regard this payment as the ‘settlement of an employee’s debt’. I cannot find any reference to this issue in the Income Tax Act and would appreciate your opinion.

Answer:

Strictly speaking this does amount to a taxable fringe benefit.
There would have been no value on the benefit, however, if the subscriptions were paid for the employees’ membership to a professional body (for example the law society for attorneys), if such membership was a condition of their employment.
However, in your case, the membership doesn’t seem to be for a professional body, so the benefit should be fully taxable.  

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