| 21/11/2008 |
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| Board of Special Commissioners - Cases |
| Case No. 26/72 |
Decided: 26 January, 1973 |
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Salary received by religious bound by a vow of poverty
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Appellant, a member of a religious order, was bound by the Constitution of his order to hand over his earnings to his superiors. He pleaded that once he could not have actually received the money himself and the order was tax-exempt, the income was not chargeable to tax.
The Board held that:
- the contract of employment is entered into by the taxpayer personally and the Order was not party to the contract;
- whereas members of monastic orders may not, in terms of the provisions of the Civil Code dispose or receive by will, they are not incapacitated from entering into an agreement;
- it was held by the English courts that "mere renunciation or waiver of salary will not relieve the salary from tax, unless it can be said on the true view of the facts that the renunciations or waiver took effect before the salary was paid to or put at the disposal of the employee";
- the salary is received personally by taxpayer and at that point in time income is earned by him; the transfer of the money to his order is merely an application of an income which is, in the first instance, chargeable to tax.
An appeal was entered before the Court from this decision (see case no. 98).
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