Author: admin_kmos

Subsection 2, 3, 4 of section 6B of ITA

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(2)     In determining the normal tax payable by any natural person there must be deducted an amount, to be known as the additional medical scheme fees tax credit, equal to the sum of the amounts allowed to that natural person by way of rebates under subsection (3).

[Subsection (2) substituted by section 9 of Act 15 of 2016 effective on 19 January 2017]

(3)     The amount of the additional medical expenses tax credit must be-

(a)     where the person is entitled to a rebate under section 6(2)(b),the aggregate of-

(i)      33,3 per cent of so much of the amount of the fees paid by the person to a medical scheme or fund contemplated in section 6A(2)(a) as exceeds three times the amount of the medical scheme fees tax credit to which that person is entitled under section 6A(2)(b); and

(ii)     33,3 per cent of the amount of qualifying medical expenses paid by the person;

(b)     where the person, his or her spouse or his or her child is a person with a disability, the aggregate of-

(i)      33,3 per cent of so much of the amount of the fees paid by the person to a medical scheme or fund contemplated in section 6A(2)(a) as exceeds three times the amount of the medical scheme fees tax credit to which that person is entitled under section 6A(2)(b); and

(ii)     33,3 per cent of the amount of qualifying medical expenses paid by the person; or

(c)     in any other case, if the aggregate of-

(i)      the amount of the fees paid by the person to a medical scheme or fund contemplated in section 6A(2)(a) as exceeds four times the amount of the medical scheme fees tax credit to which that person is entitled under section 6A(2)(b); and

(ii)     the amount of qualifying medical expenses paid by the person,

exceeds 7,5 per cent of the person’s taxable income (excluding any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit and severance benefit), 25 per cent of the excess.

[Paragraph (c) substituted by section 3 of Act 43 of 2014 effective on 1 March 2014]

(4)     For the purposes of this section, any amount contemplated in subsection (3) or the definition of ‘qualifying medical expenses’ that has been paid by-

(a)     the estate of a deceased person is deemed to have been paid by the person on the day before his or her death; or

(b)     an employer of the person is, to the extent that the amount has been included in the income of that person as a taxable benefit in terms of the Seventh Schedule, deemed to have been paid by that person.

(5)

(a)     The Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act, that, with effect from a date or dates mentioned in that announcement, the amounts allowed to a natural person by way of rebates under subsection (3) will be altered to the extent mentioned in the announcement.

(b)     If the Minister makes an announcement of an alteration contemplated in paragraph (a), that alteration comes into effect on the date or dates determined by the Minister in that announcement and continues to apply for a period of 12 months from that date or those dates subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.

[Subsection (5) added by section 6 of Act 23 of 2018 effective on 17 January 2019]

“Qualifying medical expenses” definition of section 6B of ITA

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‘qualifying medical expenses’ means-

 

(a)     any amounts (other than amounts recoverable by a person or his or her spouse) which were paid by the person during the year of assessment to any duly registered-

 

(i)      medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopedist for professional services rendered or medicines supplied to the person or any dependant of the person;

 

(ii)     nursing home or hospital or any duly registered or enrolled nurse, midwife or nursing assistant (or to any nursing agency in respect of the services of such a nurse, midwife or nursing assistant) in respect of the illness or confinement of the person or any dependant of the person; or

 

(iii)    pharmacist for medicines supplied on the prescription of any person mentioned in subparagraph (i) for the person or any dependant of the person;

  

(b)     any amounts (other than amounts recoverable by a person or his or her spouse) which were paid by the person during the year of assessment in respect of expenditure incurred outside the Republic on services rendered or medicines supplied to the person or any dependant of the person, and which are substantially similar to the services and medicines contemplated in   paragraph (a); and

  

(c)     any expenditure that is prescribed by the Commissioner (other than expenditure recoverable by a person or his or her spouse) necessarily incurred and paid by the person during the year of assessment in consequence of any physical impairment or disability suffered by the person or any dependant of the person.

Section 6 (ITA) – Normal tax rebates

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6.     Normal tax rebates

(1)     In determining the normal tax payable by any natural person, other than normal tax in respect of any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit or severance benefit, there must be deducted an amount equal to the sum of the amounts allowed to the natural person by way of rebates under subsection (2).

[Subsection (1) substituted by section 4 of Act 90 of 1988, section 4 of Act 70 of 1989, section 4 of Act 129 of 1991, section 5 of Act 21 of 1995, section 5 of Act 8 of 2007, section 7 of Act 60 of 2008, section 9 of Act 24 of 2011 and section 4 of Act 25 of 2015 and section 7 of Act 15 of 2016 effective on 19 January 2017]

(2)     In the case of a natural person there shall, subject to the provisions of subsection (4), be allowed by way of –

(a)     a primary rebate, an amount of R17 235;

[Paragraph (a) amended by section 4 of Act 36 of 1996, by section 3 of Act 28 of 1997, by section 22(a) of Act 30 of 1998, by section 5(a) of Act 32 of 1999, by section 15(a) of Act 30 of 2000, by section 6(a) of Act 19 of 2001, by section 11 of Act 30 of 2002, substituted by section 35 of Act 12 of 2003, by section 6 of Act 16 of 2004, by section 3 of Act 9 of 2005, amended by section 20 of Act 9 of 2006, by section 2(2)(a) of Act 8 of 2007, by section 1(2)(a) of Act 3 of 2008, by section 6(3) of Act 17 of 2009, by section 5(3) of Act 7 of 2010, by section 6(3) of Act 24 of 2011, by section 9(1)(b) of Act 24 of 2011 and substituted by section 2(1) of Act 13 of 2012, by section 4(1) of Act 23 of 2013, by section 3(1) of Act 42 of 2014, by section 4(1) of Act 13 of 2015, by section 5(1) of Act 13 of 2016, by section 4(1) of Act 14 of 2017, by section 3(1) of Act 21 of 2018, by section 2(1) of Act 32 of 2019, by section 3(1) of Act 22 of 2020, by section 2(1) of Act 19 of 2021, by section 2(1) of Act 19 of 2022 and by section 3(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]

(b)     a secondary rebate, if the taxpayer was or, had he or she lived, would have been 65 years of age or older on the last day of the year of assessment, an amount of R9 444; and

[Paragraph (b) amended by section 22(b) of Act 30 of 1998, by section 5(b) of Act 32 of 1999, by section 15(b) of Act 30 of 2000, by section 6(b) of Act 19 of 2001, substituted by section 35 of Act 12 of 2003, by section 6 of Act 16 of 2004, by section 3 of Act 9 of 2005, amended by section 2(2)(a) of Act 8 of 2007, by section 1(2)(a) of Act 3 of 2008, by section 6(3) of Act 17 of 2009, by section 5(3) of Act 7 of 2010, by section 6(3) of Act 24 of 2011, by section 9(1)(c) of Act 24 of 2011 and substituted by section 2(1) of Act 13 of 2012, by section 4(1) of Act 23 of 2013, by section 3(1) of Act 42 of 2014, by section 4(1) of Act 13 of 2015, by section 4(1) of Act 14 of 2017, by section 3(1) of Act 21 of 2018, by section 2(1) of Act 32 of 2019, by section 3(1) of Act 22 of 2020, by section 2(1) of Act 19 of 2021, by section 2(1) of Act 19 of 2022 and by section 3(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]

(c)     a tertiary rebate if the taxpayer was or, had he or she lived, would have been 75 years of age or older on the last day of the year of assessment, an amount of R3 145.

[Subsection (2) amended by section 5(a) and (b) of Act 91 of 1982, by section 4 of Act 121 of 1984, by section 3(a) and (b) of Act 96 of 1985, by section 4 of Act 85 of 1987, by section 4(b) and (c) of Act 90 of 1988, substituted by section 4(1)(a) of Act 70 of 1989, amended by section 3(a), (b) and (c) of Act 101 of 1990, by section 4(b), (c), (d) and (e) of Act 129 of 1991, by section 4(a), (b) and (c) of Act 141 of 1992 and substituted by section 5(a) of Act 21 of 1995. Paragraph (c) added by section 9(1)(d) of Act 24 of 2011 and substituted by section 2(1) of Act 13 of 2012, by section 4(1) of Act 23 of 2013, by section 3(1) of Act 42 of 2014, by section 4(1) of Act 13 of 2015, by section 4(1) of Act 14 of 2017, by section 3(1) of Act 21 of 2018, by section 2(1) of Act 32 of 2019, by section 3(1) of Act 22 of 2020, by section 2(1) of Act 19 of 2021, by section 2(1) of Act 19 of 2022 and by section 3(1) of Act 19 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]

(3)     ……….

(4)     Where the period assessed is less than 12 months, the amount to be allowed by way of a rebate under subsection (2) shall be such amount as bears to the full amount of such rebate, the same ratio as the period assessed bears to 12 months.

(5)     ……….

[Subsection (5) added by section 8 of Act 7 of 2010, substituted by section 9 of Act 24 of 2011 and deleted by section 4 of Act 25 of 2015 effective on 8 January 2016]

(6)

(a)     The Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act, that, with effect from a date or dates mentioned in that announcement, the amounts allowed to a natural person by way of rebates under subsection (2) will be altered to the extent mentioned in the announcement.

(b)     If the Minister makes an announcement of an alteration contemplated in paragraph (a), that alteration comes into effect on the date or dates determined by the Minister in that announcement and continues to apply for a period of 12 months from that date or those dates, subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.

[Subsection (6) added by section 4 of Act 23 of 2018 effective on 17 January 2019]

“Equity share” definition of section 9C of ITA

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“equity share”, includes a participatory interest in a portfolio of a collective investment scheme in securities and a portfolio of a hedge fund collective investment scheme excluding a share which at any time prior to the disposal of that share was-

[Words preceding paragraph (a) substituted by section 17 of Act 23 of 2018 effective on 17 January 2019]

(a)     a share in a share block company as defined in section 1 of the Share Blocks Control Act;


(b)     a share in a company which was not a resident, other than a company contemplated in paragraph (a) of the definition of “listed company”; or


(c)     a hybrid equity instrument as defined in section 8E;

[Definition of “equity share” inserted by section 24 of Act 24 of 2011 and substituted by section 18 of Act 31 of 2013 and section 12 of Act 25 of 2015 effective on 1 January 2016]

“Connected person” definition of section 9C of ITA

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(1)     For the purposes of this section –

“connected person” means a connected person as defined in section 1, provided that the expression ‘and no holder of shares holds the majority voting rights in the company’ in paragraph (d)(v) of that definition shall be disregarded;

Section 9A (ITA) – Blocked foreign funds

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9A.     Blocked foreign funds

 

(1)     Where any amount, or any portion of any amount, received by or accrued to any person which is required to be included in the income of that person during any year of assessment may not be remitted to the Republic during that year as a result of currency or other restrictions or limitations imposed in terms of the laws of the country where the amount arose, that person shall be allowed to deduct from his or her income for that year an amount equal to so much of the amount or portion which may not be remitted as is required to be included in the income of that person for that year.

(2)     The amount or portion which may not be remitted during the year of assessment contemplated in subsection (1) shall be deemed to be an amount received by or accrued to the person contemplated in that subsection in the following year of assessment.

(3)     Where any amount, or any portion of any amount, of the net income of a controlled foreign company in respect of a foreign tax year of the controlled foreign company may not be remitted to the Republic for the reasons contemplated in subsection (1), there shall be allowed to be deducted from the net income of the controlled foreign company for that foreign tax year an amount equal to so much of the amount or portion which may not be remitted.

(4)     The amount or portion which may not be remitted as contemplated in subsection (3) shall be deemed to be an amount received by or accrued to the controlled foreign company contemplated in that subsection in the following foreign tax year of the controlled foreign company.


9B.    ………

Subsection 2, 3 and 4 of section 9 of ITA

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(2)     An amount is received by or accrues to a person from a source within the Republic if that amount-

(a)     constitutes a dividend received by or accrued to that person;

(b)     constitutes interest as defined in section 24J where that interest-

(i)      is attributable to an amount incurred by a person that is a resident, unless the interest is attributable to a permanent establishment which is situated outside the Republic; or

(ii)     is received or accrues in respect of the utilisation or application in the Republic by any person of any funds or credit obtained in terms of any form of interest-bearing arrangement;

(c)     constitutes a royalty that is attributable to an amount incurred by a person that is a resident, unless that royalty is attributable to a permanent establishment which is situated outside the Republic;

(d)     constitutes a royalty that is received or accrues in respect of the use or right of use of or permission to use in the Republic any intellectual property as defined in section 23I;

(e)     is attributable to an amount incurred by a person that is a resident and is received or accrues in respect of the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information, or the rendering of or the undertaking to render, any assistance or service in connection with the application or utilization of such knowledge or information, unless the amount so received or accrued is attributable to a permanent establishment which is situated outside the Republic;

(f)      is received or accrues in respect of the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information for use in the Republic, or the rendering of or the undertaking to render, any assistance or service in connection with the application or utilisation of such knowledge or information;

(g)     is received or accrues in respect of the holding of a public office to which that person has been appointed or is deemed to have been appointed in terms of an Act of Parliament;

(h)     is received or accrues in respect of services rendered to or work or labour performed for or on behalf of any employer-

(i)      in the national, provincial or local sphere of government of the Republic;

(ii)     that is a constitutional institution listed in Schedule 1 to the Public Finance Management Act;

(iii)    that is a public entity listed in Schedule 2 or 3 to that Act; or

(iv)    that is a municipal entity as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000);

(i)      constitutes a lump sum, a pension or an annuity payable by a pension fund, pension preservation fund, provident fund or provident preservation fund and the services in respect of which that amount is so received or accrues were rendered within the Republic: Provided that if the amount is received or accrues in respect of services which were rendered partly within and partly outside the Republic, only so much of that amount as bears to the total of that amount the same ratio as the period during which the services were rendered in the Republic bears to the total period during which the services were rendered must be regarded as having been received by or accrued to the person from a source within the Republic;

 [Words preceding the proviso substituted by section 10 of Act 43 of 2014 and section 18 of Act 15 of 2016 effective on 1 March 2017, applies in respect of years of assessment commencing on or after that date]

(j)      constitutes an amount received or accrued in respect of the disposal of an asset that constitutes immovable property held by that person or any interest or right of whatever nature of that person to or in immovable property contemplated in paragraph 2 of the Eighth Schedule and that property is situated in the Republic;

(k)     constitutes an amount received or accrued in respect of the disposal of an asset other than an asset contemplated in paragraph (j) if—

(i)      that person is a resident and-

(aa)   that asset is not effectively connected to a permanent establishment of that person which is situated outside the Republic; and

(bb)   the proceeds from the disposal of that asset are not subject to any taxes on income payable to any sphere of government of any country other than the Republic; or

(ii)     that person is not a resident and that asset is effectively connected to a permanent establishment of that person which is situated in the Republic; or

[Paragraph (k) amended by section 16 of Act 23 of 2018 and by section 5 of Act 23 of 2020 and substituted by section 6(a) of Act 17 of 2023]

(l)      is attributable to any exchange difference determined in terms of section 24I in respect of any exchange item as defined in that section to which that person is a party if—

(i)      that person is a resident and—

(aa)   that exchange item is not effectively connected to a permanent establishment of that person which is situated outside the Republic; and

(bb)   that amount is not subject to any taxes on income payable to any sphere of government of any country other than the Republic; or

(ii)     that person is not a resident and that exchange item is effectively connected to a permanent establishment of that person which is situated in the Republic.

[Paragraph (l) substituted by section 6(b) of Act 17 of 2023]

(3)       ……….

[Subsection (3) substituted by section 16 of Act 31 of 2013 and section 10 of Act 43 of 2014 and deleted by section 18 of Act 15 of 2016 effective on 1 March 2017, applies in respect of years of assessment commencing on or after that date]

(4)     An amount is received by or accrues to a person from a source outside the Republic if that amount-

(a)     constitutes a foreign dividend received by or accrued to that person;

(b)     constitutes interest as defined in section 24J(1) received by or accrued to that person that is not from a source within the Republic in terms of subsection (2)(b);

[Paragraph (b) substituted by section 11 of Act 25 of 2015 effective on 8 January 2016]

(c)     constitutes a royalty received by or accrued to that person that is not from a source within the Republic in terms of subsection (2)(c) or (d);

(d)     constitutes an amount received or accrued to that person in respect of the disposal of an asset that is not from a source within the Republic in terms of subsection (2)(j) or (k); or

(e)     is attributable to any exchange difference determined in terms of section 24I in respect of any exchange item as defined in that section to which that person is a party and is not from a source within the Republic in terms of subsection (2)(l).