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Claiming deductions for business expenses working as an independent contractor for a foreign company

Posted 19 November 2014 under Tax Questions

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I work as an independent contractor for a company based in San Francisco, USA from my home office in Cape Town. Each month I invoice them for the number of hours worked and they pay in USD and I handle the forex to convert that to Rands.

I have some expenses directly incurred in generating this income (telecoms costs, software licenses, computer equipment depreciation and a portion of my electricity and rent for the home office, etc). I don't have an IRP5 from them since I'm not an employee and they aren't a South African company. I have completed your very helpful wizard driven process for completing a reference ITR12, but the final step says that I can't depreciate personal items, claim home office expenses or other expenses without filling in the IRP5/IT3a section.

Is it possible to claim for these expenses in my situation (approx R48,000 on R916,000 revenue)?

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TaxTimTaxTim says:
19 November 2014 at 22:09

You would include all of this under the Local Business Income section including the income and all the expenses. We will ask you individual for these amounts. Put everything there.

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