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Income Tax Act 58 of 1962: Additional Deduction for Learnership Agreements.

24 October 2017   (0 Comments)
Posted by: Zina Girald
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This Note provides clarity on the interpretation and application of section 12H which provides deductions for registered learnership agreements.

The amendments to section 12H by the Taxation Laws Amendment Act 15 of 2016 have been taken into account in this Note and are effective from 1 October 2016 and applicable to all learnership agreements entered into on or after that date. This Note deals with learnership agreements entered into from 1 October 2016. The relevant previous issue of Interpretation Note 20 should be consulted for learnership agreements entered into before that date. Section 12H provides additional deductions to employers for qualifying learnership agreements. These additional deductions are intended as an incentive for employers to train employees in a regulated environment in order to encourage skills development and job creation. Training contracts qualifying for these deductions are learnership agreements and apprenticeships registered with a SETA. These additional deductions consist of an annual allowance and a completion allowance. Effective from 1 October 2016, the amount of the allowance will depend on the NQF level held by the learner before entering into the learnership agreement.

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