South African Revenue Service released Interpretation Note 109 of 7 February 2019 clarifying the tax treatment of lease premiums for lessors and lessees. The note specifies that:
- Lessors that receive lease premiums are obliged to include the full amount of the premium in their gross income in the earlier of the year of assessment of receipt or accrual.
- Lessees who pay the premium to a lessor for the right of use or occupation are generally allowed an allowance over the period of the lease. …