On 30 March 2021, SARS issued an update to the Interpretation Note.

SARS’ Interpretation Note 14 provides guidance on allowances, advances and reimbursements provided by employers to employees.

Meal reimbursements for day trips taken by the employee

With effect from 1 March 2021, where an employee is reimbursed for the cost of meals and incidentals when taking a day trip, the reimbursement is subject to a limit according to the Government Gazette (currently R139 per day). Any amount that is reimbursed over and above this limit is fully taxable and subject to employees' tax withholding.

In addition, the employee must incur the expenditure on the instruction or with the permission (e.g. if the employer's policy allows for the expenditure to be incurred) of the employer, and proof of expenditure must be provided by the employee.

 To the extent that the actual costs are less than R139, only the actual costs may be reimbursed tax-free. Any amount reimbursed more than not only the R139 limit but also the actual costs would be fully taxable.

Travel logbook: Reason for trip requirement

SARS now requires that travel logbooks must provide additional detail related to the reason for the trip. More specifically, details (including contact details) of the person visited and with and for whom the engagement was undertaken must be recorded. SARS requires that as much detail as possible be provided to enable them to verify the claim for a deduction. This detail is now also required for reimbursements for ride-hailing service claims (such as Uber).

Going forward, individuals should be aware of the added requirements, and employers would do well to update internal policies to reflect these changes.