Are Commissions joined on 2 or more IRP5's for Section 23(m) expenditure?

[Buttercup]

Let say a taxpayer earned 2 IRP5s over one tax period. Employed by Company A for 6 month and then employed by Company B for 6 month.

Company A - commission structure on IRP5 was more than 50% of the gross income and therefore the taxpayer qualified for section 23(m) where expenses can be claimed for 6 months.

Company B – Commission was less than the gross and therefore no expenditure can be claimed.

Or do you have to combined the commission over a tax year and then calculate if the commission is more than 50% of the gross?

[Beancounter]

I think you should claim the expenses pertaining to the period that income was mainly derived in the form of commission i.e. the period for which an IRP5 was issued where the commission constitutes more than 50% of total income. When the return is audited, include a letter quoting section 23(m) and indicate that expenses are being claimed for that period as the taxpayer's income was derived mainly from commission income. Should work.

[Buttercup]

Thanks Beancounter,

Great - I will have a letter ready.