Page 58 - P6 Slide Taxation - Lecture Day 7 - Various Topics

Exemption certificate

The Commissioner may issue an exemption certificate (IRP 30) to a labour broker (par 2(5)). This will
absolve the client (employer) from having to deduct employees’ tax from any payments made to the
labour broker. The following requirements must be met by the labour broker before an exemption
certificate will be granted (par 2(5)( a )): l
• He must carry on an independent trade and be registered as a provisional taxpayer. l
• He must be registered as an employer. l
• He must have submitted all returns required to be submitted in terms of the Act. l
• He must not receive more than 80% of his gross income during the year of assessment from any
one client or an associated institution in relation to that client. The 80% test is not applicable if the
labour broker, throughout the year of assessment, employed three or more full-time employees
(other than shareholders, members or connected persons in relation to the labour broker) who are
engaged, on a full-time basis, in the business of the labour broker of rendering the relevant service.
• He must not provide the services of another labour broker to any of his clients. L
• He must not be contractually obliged to provide a specified employee to render any service to the
client.

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