Category: Section 24I (ITA) – Gains or losses on foreign exchange transactions

Section 24I

 

  1. Definition of “affected forward exchange contract” inserted by section 18 of Act 21 of 1994, substituted by section 13 of Act 36 of 1996, amended by section 35 of Act 30 of 1998 and section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (b) of definition of “exchange item” substituted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Definition of “exchange item” amended by section 18 of Act 21 of 1994 and substituted by section 36 of Act 60 of 2001.

 

  1. Definition of “foreign currency” substituted by section 31 of Act 59 of 2000, section 36 of Act 60 of 2001 and section 27 of Act 74 of 2002.

 

  1. Paragraph (c) of definition of “local currency” amended by section 68 of Act 31 of 2013 effective on 27 February 2013.

 

  1. Paragraph (e) of definition of “local currency” added by section 68 of Act 31 of 2013 w.ef. 27 February 2013.

 

  1. Paragraph (f) of definition of “local currency” added by section 68 of Act 31 of 2013 effective on 1 April 2014.

 

  1. Definition of “local currency” inserted by section 36 of Act 60 of 2001, substituted by section 27 of Act 74 of 2002, amended by section 42 of Act 45 of 2003 and section 40 of Act 35 of 2007 and substituted section 47 of Act 7 of 2010 effective on 1 January 2011.

 

  1. Paragraph (a) of definition of “realised” substituted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (b) of definition of “realised” amended by section 27 of Act 74 of 2002.

 

  1. Paragraph (c) of definition of “realised” substituted by section 11 of Act 140 of 1993 and amended by section 27 of Act 74 of 2002.

 

  1. Paragraph (d) of definition of “realised” added by section 27 of Act 74 of 2002.

 

  1. Words preceding subparagraph (a)(i) of definition of “ruling exchange rate” substituted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subparagraph (a)(i) of definition of “ruling exchange rate” substituted by section 33 of Act 31 of 2005.

 

  1. Subparagraph (a)(ii) of definition of “ruling exchange rate” substituted by section 33 of Act 31 of 2005.

 

  1. Proviso to paragraph (a) of definition of “ruling exchange rate” substituted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subparagraph (b)(ii) of definition of “ruling exchange rate” substituted by section 18 of Act 21 of 1994, section 35 of Act 30 of 1998, section 33 of Act 31 of 2005 and section 26 of Act 9 of 2006.

 

  1. Item (c)(ii)(bb) of definition of “ruling exchange rate” substituted by section 27 of Act 74 of 2002.

 

  1. Subparagraph (c)(ii) of definition of “ruling exchange rate” substituted by section 35 of Act 30 of 1998.

 

  1. Subparagraph (c)(iii) of definition of “ruling exchange rate” amended by section 11 of Act 140 of 1993.

 

  1. Subparagraph (c)(iv) of definition of “ruling exchange rate” deleted by section 11 of Act 140 of 1993.

 

  1. Paragraph (d) of definition of “ruling exchange rate” inserted by section 27 of Act 74 of 2002.

 

  1. Definition of “ruling exchange rate” amended by section 18 of Act 21 of 1994.

 

  1. Definition of “spot rate” substituted by section 36 of Act 60 of 2001 and deleted by section 33 of Act 31 of 2005.

 

  1. Paragraph (a) of definition of “transaction date” deleted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (c) of definition of “transaction date” deleted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (e) of definition of “transaction date” amended by section 27 of Act 74 of 2002.

 

  1. Paragraph (f) of definition of “transaction date” amended by section 27 of Act 74 of 2002.

 

  1. Paragraph (g) of definition of “transaction date” added by section 27 of Act 74 of 2002.

 

  1. Definition of “transitional exchange difference” deleted by section 36 of Act 60 of 2001.

 

  1. Definition of “translate” substituted by section 36 of Act 60 of 2001.

 

  1. Paragraph (2)(c) substituted by section 27 of Act 74 of 2002.

 

  1. Paragraph (2)(d) added by section 27 of Act 74 of 2002.

 

  1. Subsection (2) amended by section 31 of Act 59 of 2000, substituted by section 36 of Act 60 of 2001 and amended by section 27 of Act 74 of 2002 and section 23 of Act 32 of 2004.

 

  1. Paragraph (3)(a) amended by section 38 of Act 17 of 2009 and substituted by section 53 of Act 22 of 2012 effective on 1 January 2013, section 68(1)(d) of Act 31 of 2013 effective on 12 December 2013 and section 68(1)(e) of Act 31 of 2013 effective on 1 January 2014.

 

  1. Paragraph (3)(b) amended by section 38 of Act 17 of 2009.

 

  1. Paragraph (3)(c) substituted by section 20 of Act 3 of 2008 and deleted by section 38 of Act 17 of 2009.

 

  1. Subsection (3) substituted by section 36 of Act 60 of 2001.

 

  1. Subsection (4) substituted by section 18 of Act 21 of 1994, amended by section 35 of Act 30 of 1998 and section 31 of Act 59 of 2000 and deleted by section 27 of Act 74 of 2002.

 

  1. Subsection (5) substituted by section 18 of Act 21 of 1994. amended by section 18 of Act 28 of 1997 and deleted by section 20 of Act 3 of 2008.

 

  1. Subsection (6) substituted by section 26 of Act 53 of 1999 and section 36 of Act 60 of 2001.

 

  1. Words preceding subparagraph (7)(a)(i) substituted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subparagraph (7)(a)(ii) substituted by section 33 of Act 31 of 2005.

 

  1. Paragraph (7)(b) substituted by section 11 of Act 140 of 1993 and section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (7)(c) substituted by section 11 of Act 140 of 1993 and section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (a) of the proviso to subsection (7) substituted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (b) of the proviso to subsection (7) substituted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subsection (7) amended by section 11 of Act 140 of 1993, section 18 of Act 21 of 1994, section 13 of Act 36 of 1996 and section 36 of Act 60 of 2001.

 

  1. Subsection (7A) inserted by section 18 of Act 21 of 1994, amended by section 36 of Act 60 of 2001, section 33 of Act 31 of 2005, section 26 of Act 9 of 2006, section 68(1)(f) of Act 31 of 2013 effective on 31 December 2013and deleted by section 68(1)(g) of Act 31 of 2013 effective on 1 January 2014.

 

  1. Subsection (8) substituted by section 36 of Act 60 of 2001.

 

  1. Subsection (9) added by section 36 of Act 60 of 2001, substituted by section 42 of Act 45 of 2003 and deleted by section 33 of Act 31 of 2005.

 

  1. Subsection (10) added by section 36 of Act 60 of 2001, substituted by section 27 of Act 74 of 2002, amended by section 42 of Act 45 of 2003, substituted by section 33 of Act 31 of 2005, amended by section 26 of Act 9 of 2006, section 23 of Act 8 of 2007, section 40 of Act 35 of 2007, section 53 of Act 22 of 2012 effective on 1 January 2014 – comes into operation in terms of section 53 of Act 22 of 2012 as substituted by section 197 of Act 31 of 2013) and deleted by section 68 of Act 31 of 2013 effective on 1 January 2014.

 

  1. Words following item (10A)(b)(ii)(bb) substituted by section 68(1)(i) effective on 1 January 2013 and section 68(1)(j) effective on 1 January 2014.

 

  1. Subsection (10A) inserted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subsection (11) added by section 36 of Act 60 of 2001, substituted by section 27 of Act 74 of 2002, amended by section 42 of Act 45 of 2003 and deleted by section 53 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subsection (11A) inserted by section 19 of Act 20 of 2006 effective on 31 December 2006, amended by section 23 of Act 8 of 2007, substituted by section 52 of Act 24 of 2011 effective on 1 January 2012 and deleted by section 68 of Act 31 of 2013 effective on 1 January 2014.

 

  1. Subsection (12) added by section 36 of Act 60 of 2001 and substituted by section 27 of Act 74 of 2002.

 

  1. Section 24I inserted by section 21 of Act 113 of 1993.

“Acquisition rate” definition of section 24I of ITA

Posted on by admin_kmos

(1)     For the purposes of this section –

 

“acquisition rate” means the exchange rate in respect of an exchange item obtained by dividing the amount of the expenditure incurred for the acquisition of such exchange item by the foreign currency amount in respect of such exchange item;

“Affected contract” definition of section 24I of ITA

Posted on by admin_kmos

“affected contract” means any foreign currency option contract or forward exchange contract to the extent that the foreign currency option contract or forward exchange contract has been entered into by any person during any year of assessment to serve as a hedge in respect of a debt, where-

(a)     that debt-

(i)      is to be utilised by that person for the purposes of acquiring any asset or for financing any expenditure; or

(ii)     will arise from the sale of any asset or supply of any services,

in terms of an agreement entered into by that person in the ordinary course of the person’s trade prior to the end of the current year of assessment; and

(b)     that debt has not yet been incurred by such person or the amount payable in respect of such debt has not yet accrued during that current year of assessment;

[Definition of “affected forward exchange contract” inserted by section 18 of Act 21 of 1994, substituted by section 13 of Act 36 of 1996, amended by section 35 of Act 30 of 1998 and substituted by section 53 of Act 22 of 2012 and section 42 of Act 17 of 2017 effective on 18 December 2017]

“Exchange difference” definition of section 24I of ITA

Posted on by admin_kmos

“exchange difference” means the foreign exchange gain or foreign exchange loss in respect of an exchange item during any year of assessment determined by multiplying such exchange item by the difference between –

 

(a)     the ruling exchange rate on transaction date in respect of such exchange item during that year of assessment, and –

 

(i)      the ruling exchange rate at which such exchange item is realised during that year of assessment; or

 

(ii)     the ruling exchange rate at which such exchange item is translated at the end of that year of assessment; or

 

(b)     the ruling exchange rate at which such exchange item was translated at the end of the immediately preceding year of assessment or at which it would have been translated had this section been applicable at the end of that immediately preceding year of assessment, and –

 

(i)      the ruling exchange rate at which such exchange item is realised during that year of assessment; or

 

(ii)     the ruling exchange rate at which such exchange item is translated at the end of that year of assessment;

“Exchange item” definition of section 24I of ITA

Posted on by admin_kmos

“exchange item” of or in relation to a person means an amount in a foreign currency-

 

(a)     which constitutes any unit of currency acquired and not disposed of by that person;

 

(b)     owing by or to that person in respect of a debt incurred by or payable to such person;

 

(c)     owed by or to that person in respect of a forward exchange contract; or

 

(d)     where that person has the right or contingent obligation to buy or sell that amount in terms of a foreign currency option contract.