37C. Deductions in respect of environmental conservation and maintenance
(1) Expenditure actually incurred by a taxpayer to conserve or maintain land is deemed to be expenditure incurred in the production of income and for purposes of a trade carried on by that taxpayer, if-
(a) the conservation or maintenance is carried out in terms of a biodiversity management agreement that has a duration of at least five years entered into by the taxpayer in terms of section 44 of the National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004); and
(b) land utilised by the taxpayer for the production of income and for purposes of a trade consists of, includes or is in the immediate proximity of the land that is the subject of the agreement contemplated in paragraph (a).
(2)
(a) Any deduction of expenditure contemplated in subsection (1) must not be allowed to the extent that the expenditure exceeds the income of the taxpayer derived from trade carried on by the taxpayer on land utilised as contemplated in subsection (1)(b) in any year of assessment.
(b) The amount by which the deduction exceeds the income of the taxpayer so derived must be deemed to be expenditure incurred by the taxpayer in the following year of assessment.
(3) An amount equal to the expenditure actually incurred by a taxpayer to conserve or maintain land owned by the taxpayer is for purposes of section 18A deemed to be a donation by the taxpayer actually paid or transferred during the year to the Government for which a receipt has been issued in terms of section 18A(2), if the conservation or maintenance is carried out in terms of a declaration that has a duration of at least 30 years in terms of section 20, 23 or 28 of the National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003).
(4) If during the current or any previous year of assessment a deduction is or was allowed to the taxpayer in terms of subsection (1) or (3) in respect of expenditure incurred to conserve or maintain land in terms of an agreement or declaration contemplated in those subsections, and the taxpayer subsequently is in breach of that agreement or violates that declaration, an amount equal to the deductions allowed in respect of expenditure incurred within the period of five years preceding the breach or violation must be included in the income of the taxpayer for the current year of assessment.
(6) If-
(a) land is declared a national park or nature reserve in terms of an agreement under section 20(3) or 23(3) of the National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003); and
(b) the declaration is endorsed on the title deed of the land and has a duration of at least 99 years,
an amount equal to 10 per cent of the lesser of the cost or market value of the land without regard to any right of use retained by any taxpayer is for purposes of section 18A and paragraph 62 of the Eighth Schedule deemed to be a donation paid or transferred to the Government for which a receipt has been issued in terms of section 18A(2), in the year of assessment in which the land is so declared and each of the succeeding nine years of assessment.
(6) If the taxpayer retains a right of use of land contemplated in subsection (5), the amount deemed to be a donation in terms of that subsection is an amount that bears to the amount determined in terms of that subsection the same ratio as the market value of the land subject to the right of use bears to the market value of the land had that land not been subject to the right of use.
(7) If during the current or any previous year of assessment a deduction is or was allowed to the taxpayer in terms of subsection (5) in respect of a deemed donation in terms of a declaration contemplated in that subsection, and the taxpayer subsequently violates that declaration, an amount equal to the deduction allowed in respect of the deemed donation within the period of five years preceding the violation must be included in the income of the taxpayer for the current year of assessment.
37D. ……….
37E. ……….