We published an explanation from SAIA in Thursday’s Moonstone Monitor on this topic. This elicited more responses from readers.
SARS published Interpretation Note: No. 35 (Issue 3), on 31 March 2010. It contains a number of tests which one can apply to test your “status’.
One such test, pointed out by a reader, states:
Must the person who is personally rendering the service, or the company, close corporation or trust, perform the duties mainly at the premises of the client, and if so, is that person subject to the control or supervision of the client as to the manner in which the duties are performed or are to be performed? The test is the same as the one used in exclusionary paragraph (ii) of the definition of the term “remuneration”. If the services are rendered mainly at the premises of the client and the client supervises or controls the activities of the person rendering the service or the activities of the company, close corporation or trust, the test is positive.
Unfortunately, the product providers do not have a say in the matter – it is a SARS ruling which, as we explained, is actually tested by the revenue inspectors when they visit product houses.
The least painful manner to abide by this ruling, is to obtain an affidavit or solemn declaration from contracted brokers on an annual basis. As we suggested last week, open a beer, sign the affidavit, and carry on, regardless.