Bad Debts Tax Deduction
Enter the deduction in the relevant section of your ITR12 tax return on SARS eFiling. Keep all supporting documents for 5 years.
When Bad Debts Qualify
The debt must have been previously included in your income, you must have taken reasonable steps to recover it, and there must be no reasonable prospect of recovery.
Documentation Required
Keep records of the original invoice, all correspondence with the debtor, legal action taken, and a formal write-off decision.
Timing of Deduction
The deduction is claimed in the tax year when the debt is physically written off in your books, not when you first suspect it may be bad.
Frequently Asked Questions
How do I claim this deduction on my tax return?
Enter the deduction in the relevant section of your ITR12 tax return on SARS eFiling. Keep all supporting documents for 5 years.
What documents do I need?
Keep receipts, invoices, tax certificates, logbooks, and any other proof of the expense. SARS may request these during verification.
Can Admin Boss help with my deductions?
Yes. Admin Boss is a registered tax practice that can review your deductions, ensure compliance, and maximise your tax savings. Visit adminboss.co.za/need-more-info/.
Need Help With Your Tax?
Admin Boss is a registered tax practice with over 20 years of experience helping South African individuals and businesses navigate SARS.