• The tax incentive, which was due to expire in October 2006 and would only apply to registered apprenticeship partnership agreements concluded before 1 October 2006, was extended to registered training contracts concluded before 1 October 2011. and To be eligible for the allowance under Article 12H, the training agreement must also have been concluded before a certain date. This deadline has so far been extended from 1 October 2016 to 1 April 2022. 7.1 Cases in which an apprenticeship contract is deemed to be terminated…………….. 14 This guide is not intended to reflect on all the scenarios that might possibly exist, but is intended to clarify most of the questions that may arise in practice. Any issues that are not specifically addressed in this guide should be discussed with the local branch of the South African Revenue Service (SARS). Comments and/or suggestions on this manual can be sent to the following e-mail address: policycomments@sars.gov.za. An apprenticeship allowance deduction is a deduction that is in addition to other income tax deductions granted to employers for employee employment and skills development, i.e. expenses for their salaries and/or wages and skills. The information contained in this guide is based on the legislation of 8 January 2009, including the amendments made by the Tax Laws Amendment Act, No.

60 of 2008. This guide provides general guidelines for tax incentives for apprenticeship agreements. 4.3 Factors to be taken into account in the calculation of the training allowance……………. 7 With a focus on skills development and job creation, the existing remuneration for apprenticeship partnership agreements was extended to all agreements concluded before 1 April 2022. The tax incentive for employment (ETI) has also been extended until 28 February 2019. 7.2 Recovery of authorized deductions for training allowances ………….. 15 2. GENERAL OVERVIEW OF THE TAX INCENTIVE The tax incentive for training contracts has been introduced in the form of a deduction that can be deducted from the employer`s professional income when determining the employer`s taxable income. The allowance is referred to in this guide as the “training allowance” and applies to registered training contracts and training contracts concluded or concluded during an assessment year (tax year). • A more favourable tax incentive would apply to registered training contracts concluded with persons with disabilities as from 1 July 2006.

In his Budget 2008 speech, the Minister announced that the incentive promotes short-term relief and that provision should be made for long-term learning over several years. The effectiveness of the incentive also needed to be monitored more closely, which is why new reporting provisions were introduced for employers and their respective SETAs. 4.1.1 An apprenticeship contract must have been concluded or concluded during the year of the assessment. 3 • Promote job creation by reducing the cost of hiring and training workers through learning experiences; In addition to the EIT, an employer may also be entitled to deduct an apprenticeship allowance during an assessment year if the requirements of Section 12H of the Income Tax Act are met as set out above. A tax incentive for registered apprenticeship agreements was introduced by the Minister in his 2002 Budget Speech. The purpose of this tax incentive is – 4.1.4 The employer must be the original employer within the meaning of the apprenticeship contract… 4 4.3.1 Determination of the amount deducted as a training allowance for a training contract concluded with a learner …. 8 1. INTRODUCTION Skills development is an integral part of the country`s overall objectives to reduce poverty and job decline, improve vocational qualifications and improve the country`s economic growth.

In order to give effect to the National Skills Development Strategy, the Skills Development Act No. 97 of 1998 was introduced in 1998 to provide an institutional and financial framework for skills training in the workplace. This law provides, among other things, for the registration of learners by the various SETAs. This guide is not intended to go into the exact technical and legal details often associated with taxation and should therefore not be used as a legal reference. This is not a binding general decision issued under Section 76P of The Income Tax Act No. 58 of 1962. The EIT[3] was introduced by the government on 1 January 2014 to address the socio-economic problem of youth development. .