No deductions shall in any case be made in respect of the following matters, namely—
| (a) |
the cost incurred in the maintenance of any taxpayer, his family or establishment; |
| (b) |
domestic or private expenses, including the rent of or cost of repairs of or expenses in connection with any premises not occupied for the purposes of trade or of any dwelling-house or domestic premises except in respect of such part as may be occupied for the purposes of trade: |
Provided that—
| (a) |
such part shall not be deemed to have been occupied for the purposes of trade, unless such part is specifically equipped for purposes of the taxpayer's trade and regularly and exclusively used for such purposes; and |
| (b) |
no deduction shall in any event be granted where the taxpayer's trade constitutes any employment or office unless— |
| (i) |
his income from such employment or office is derived mainly from commission or other variable payments which are based on the taxpayer's work performance and his duties are mainly performed otherwise than in an office which is provided to him by his employer; or |
| (ii) |
his duties are mainly performed in such part. |
[Proviso to section 23 substituted by section 15(a) of the Income Tax Act, 1994 (Act No. 21 of 1994)]
| (c) |
any loss or expense, the deduction of which would otherwise be allowable, to the extent to which it is recoverable under any contract of insurance, guarantee, security or indemnity, except where section 23L(3) applies; |
[Section 23(c) substituted by section 24(1) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - comes into operation on 1 January 2021 and applies in respect of years of assessment commencing on or after that date (section 24(2)]
| (d) |
any tax imposed under this Act or any interest or penalty imposed under any other Act administered by the Commissioner; |
[Section 23(d) substituted by section 271, read with paragraph 38 of Schedule 1, of the Tax Administration Act, 2011 (Act No. 28 of 2011)]
| (e) |
income carried to any reserve fund or capitalized in any way; |
| (f) |
any expenses incurred in respect of any amounts received or accrued which do not constitute income as defined in section one; |
| (g) |
any moneys, claimed as a deduction from income derived from trade, to the extent to which such moneys were not laid out or expended for the purposes of trade; |
| (h) |
interest which might have been made on any capital employed in trade; |
[Section 23(i) substituted by section 37(1)(a) of the Revenue Laws Amendment Act, 2008 (Act No. 60 of 2008) - effective 1 March 2009]
| (j) |
[Section 23(j) deleted by section 17(a) of the Revenue Laws Amendment Act, 2006 (Act No. 20 of 2006)]; |
| (k) |
any expense incurred by— |
| (i) |
a labour broker as defined in the Fourth Schedule, other than a labour broker in respect of which a certificate of exemption has been issued in terms of paragraph 2(5) of the said Schedule; or |
| (ii) |
a personal service provider as defined in the said Schedule, |
other than any expense which constitutes an amount paid or payable to any employee of such labour broker or personal service provider for services rendered by such employee, which is or will be taken into account in the determination of the taxable income of such employee and, in the case of such personal service provider, any expense, deduction or contribution contemplated in paragraphs (c), (i), (l), (nA) or (nB) of section 11, expenses in respect of premises, finance charges, insurance, repairs and fuel and maintenance in respect of assets, if such premises or assets are used wholly and exclusively for purposes of trade;
[Section 23(k) substituted by section 37(1)(b) of the Revenue Laws Amendment Act, 2008 (Act No. 60 of 2008) - effective 1 March 2009]
| (l) |
any expense incurred in respect of the payment of any restraint of trade, except as provided for in section 11(cA); |
[Section 23(l) inserted by section 28(1)(b) of the Taxation Laws Amendment Act, 2000 (Act No. 30 of 2000) - effective 23 February 2000]
| (m) |
subject to paragraph (k), any expenditure, loss or allowance, contemplated in section 11, which relates to any employment of, or office held by, any person (other than an agent or representative whose remuneration is normally derived mainly in the form of commissions based on his or her sales or the turnover attributable to him or her) in respect of which he or she derives any remuneration, as defined in paragraph 1 of the Fourth Schedule, other than— |
| (i) |
any contributions to a pension, provident fund or retirement annuity fund as may be deducted from the income of that person in terms of section 11F; |
[Section 23(m)(i) substituted by section 35(1) of the Taxation Laws Amendment Act, 2017 (Act No. 17 of 2017)]
| (ii) |
any allowance or expense which may be deducted from the income of that person in terms of section 11(c), (e), (i) or (j); |
[Section 23(m)(ii) substituted by section28(1)(a) of the Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005)]
| (iiA) |
any deduction which is allowable under section 11(nA) or (nB); |
[Section 23(m)(iiA) substituted by section 56(1)(b) of the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013) - effective 1 March 2015]
| (iii) |
[Section 23(m)(iii) deleted by section 56(1)(c) of the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013) - effective 1 March 2015] |
| (iv) |
any deduction which is allowable under section 11(a) or (d) in respect of any rent of, cost of repairs of or expenses in connection with any dwelling house or domestic premises, to the extent that the deduction is not prohibited under paragraph (b); |
[Section 23(m)(iv) inserted by section 28(1)(c) of the Revenue Laws Amendment Act, 2005 (Act No. 31 of 2005)]
| (n) |
any deduction or allowance in respect of any asset or expenditure to the extent that amount— |
| (i) |
is granted or paid to the taxpayer and is exempt from tax in terms of section 10(1)(yA); and |
[Section 23(n)(i) substituted by section 42(1)(a) of the Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012) - effective 1 January 2013]
| (ii) |
is so granted or paid for purposes of the acquisition of that asset or funding of that expenditure; |
[Proviso to section 23(n) deleted by section 42(1)(b) of the Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012)]
| (o) |
any expenditure incurred— |
| (i) |
where the payment of that expenditure or the agreement or offer to make that payment constitutes an activity contemplated in Chapter 2 of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004); |
| (ii) |
which constitutes a fine charged or penalty imposed as a result of an unlawful activity carried out in the Republic or in any other country if that activity would be unlawful had it been carried out in the Republic; or |
| (iii) |
which constitutes fruitless and wasteful expenditure as defined in section 1 of the Public Finance Management Act and determined in accordance with that Act; |
[Section 23(o)(iii) substituted by section 11 of the Taxation Laws Amendment Act, 2022 (Act No. 20 of 2022), Notice No. 1541, GG47826, dated 5 January 2023]
| (p) |
the value in respect of any cession of a policy of insurance ceded by taxpayer to— |
| (aa) |
employee (or former employee); |
| (cc) |
dependant or nominee of the employee (or former employee) or director (or former director), |
of the taxpayer; or
| (aa) |
employee (or former employee); |
| (bb) |
director (or former director); or |
| (cc) |
dependant or nominee of the employee (or former employee) or director (or former director), |
of the taxpayer; and
[Section 23(p) inserted by section 47(1)(b) of the Taxation Laws Amendment Act, 2011 (Act No. 24 of 2011) - effective 1 March 2012]
| (q) |
any expenditure incurred in the production of income in the form of foreign dividends; or |
[Section 23(q) substituted by section 56(1)(d) of the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013) - effective 1 March 2015]
| (r) |
any deduction in respect of any premium paid by a person in terms of an insurance policy if that insurance policy covers that person against illness, injury, disability, unemployment or death of that person. |
[Section 23(r) substituted by section 33(1) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014) - effective 1 March 2015]
Basic Conditions of Employment Act, 1997
