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This document deals with SARS audits in relation to school fees and reciprocity arrangements. The objective is to provide guidance in respect of reduced school fees levied on teachers.

Recent SARS activity on this issue has prompted ISASA to provide guidelines that should be adhered to in order to comply with the Seventh Schedule to the Income Tax Act 58 of 1962.

Various educational institutions in South Africa provide for reduced fees to be levied on a teacher where family members or close relatives attend the same institution.

To ensure that schools falling under the ISASA banner comply with their employee's tax obligations in relation to school fees it is important to firstly understand the approach that SARS generally follows in these matters.