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What are the tax implications for international network marketing reps?

Posted 29 August 2014 under Tax Questions

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Would Network Marketing Income (Commission) be treated as small business income? Does expenditure on MLM product (travel, merchandice etc.) & branded clothes be allowed as expenses?Would international income be taxed when paid into an international account or only when transferred to a South-African account?

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TaxTimTaxTim says:
1 September 2014 at 7:03

Unless you are a salaried employee and receive a monthly income as a salary then you will be able to deduct all expenses related to the income you earn. How does your income get earned, please explain the process and how the expenses are paid?

Are you a South African resident?

GdT says:
1 September 2014 at 16:39

Yes, I am a resident. I am an independent rep for World Ventures. Not a salaried employee. Our commission is paid into a Bank of America Mastercard in US $. Expenses are paid either with that card (reflected in $) or is paid from an SA bank account.

Expenses are mostly training, client meetings, vehicle related, home office, overseas trips.

The business is a travel business.

TaxTimTaxTim says:
3 September 2014 at 20:58

As an independent rep you are responsible for your own tax and therefore are allowed to deduct all expenses incurred in earning that income. They must be business expenses though and not personal so for things like home office and vehicle you would need to apportion between personal and business. Such as keeping a logbook for all travel and measuring the size of your office as a percentage of the overall home. Keep all receipts and invoices.

You would need to submit returns and pay tax regardless of where the money is received as you are a South African tax resident. You would need to register for Provisional Tax as well and submit a final year end return.

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