Author: admin_kmos

Section 10(1)(nB) of ITA

Posted on by admin_kmos

(nB)   any benefit or advantage accruing to any employee (as defined in paragraph 1 of the Seventh Schedule) by reason of the fact that his employer (as defined in the said paragraph), has, in consequence of the transfer of the employee from one place of employment to another place of employment or the appointment of the employee as an employee of the employer or the termination of the employee’s employment, borne the expense –

(i)      of transporting such employee, members of his household and the personal goods and possessions of himself and the members of his household from his previous place of residence to his new place of residence; or

(ii)     of the costs which have been incurred by the employee in respect of the sale of his or her previous residence and in settling in permanent residential accommodation at his or her new place of residence; or

[Subpara (ii) substituted by section 7 of Act 65 of 1986 and section 16 of Act 25 of 2015 effective on 1 January 2016]

(iii)    of hiring residential accommodation in an hotel or elsewhere for the employee or members of his household during the period ending 183 days after his transfer took effect or after he took up his appointment, as the case may be, if such residential accommodation was occupied temporarily pending the obtaining of permanent residential accommodation;

Section 10(1)(nA) of ITA

Posted on by admin_kmos

(nA)  where an employee is as a condition of his employment required while on duty to wear a special uniform which is clearly distinguishable from ordinary clothing, the value of any such uniform given to the employee by his employer, or so much of any allowance made by the employer to the employee in lieu of any such uniform as is reasonable;

Section 10(1)(l) of ITA

Posted on by admin_kmos

(l)      the amount of any royalty as defined in section 49A which is received by or accrues to any person that is not a resident, unless-

(i)      that person is a natural person who was physically present in the Republic for a period exceeding 183 days in aggregate during the twelve-month period preceding the date on which the amount is received by or accrues to that person; or

(ii)     the intellectual property or the knowledge or information in respect of which that royalty is paid is effectively connected with a permanent establishment of that person in the Republic;

[Paragraph (l) deleted by section 10 of Act 101 of 90. inserted by section 13 of Act 59 of 2000 and substituted by section 19 of Act 22 of 2012 and section 14 of Act 43 of 2014 effective on 1 January 2015]

Section 10(1)(k) of ITA

Posted on by admin_kmos

(k)

 

(i)      dividends (other than dividends paid or declared by a headquarter company) received by or accrued to any person: Provided that this exemption shall not apply –

 

(aa)   to dividends (other than those received by or accrued to or in favour of a person that is not a resident or a dividend contemplated in paragraph (b) of the definition of ‘dividend’) distributed by a company that is a REIT, or a controlled company as defined in section 25BB;

 

(bb)   ……….

 

(cc)    ………

 

(dd)   to any dividend in respect of a restricted equity instrument as defined in section 8Cto the extent that the restricted equity instrument was acquired in the circumstances contemplated in section 8C, unless-

 

(A)    the restricted equity instrument constitutes an equity share, other than an equity share that would have constituted a hybrid equity instrument as defined in section 8E(1) but for the three-year period requirement contemplated in that definition;

 

(B)     the dividend constitutes an equity instrument as defined in that section; or

 

(C)     the restricted equity instrument constitutes an interest in a trust and, where that trust holds shares, all of those shares constitute equity shares, other than equity shares that would have constituted hybrid equity instruments as defined in section 8E(1) but for the three-year period requirement contemplated in that definition;

 

(ee)    to any dividend received by or accrued to a company in consequence of-

 

(A)    any cession of the right to that dividend; or

 

(B)    the exercise of a discretionary power by any trustee of a trust,

 

unless that cession or exercise results in the holding by that company of all of the rights attaching to a share;

(ff)    to any dividends received by or accrued to a company in respect of a share borrowed by that company; or

 

(gg)   to any dividends received by or accrued to a company in respect of a share held by that company to the extent that the aggregate of those dividends does not exceed an amount equal to the aggregate of any amounts incurred by that company as compensation for any distributions in respect of any other share borrowed by the company, other than a share in respect of which any dividends were received by or accrued to that company as contemplated in paragraph (ff), where the share so borrowed and the share so held are identical shares: Provided that where the company borrowing the share has lent out any other share that is an identical share to the share so borrowed, the aggregate amount so incurred must be reduced by the amount accrued to that company as compensation for any distribution in respect of the share so lent;

[Item (gg) added by section 28 of Act 24 of 2011 effective on 1 April 2012, repealed by section 166 of Act 22 of 2012 effective on 10 January 2012, again item (gg) added by section 19 of Act 22 of 2012, amended by section 14 of Act 43 of 2014 and substituted by section 16 of Act 25 of 2015 effective on 1 January 2016]

(hh)   to any dividends received by or accrued to a company in respect of a share to the extent that-

(A) the aggregate of those dividends does not exceed an amount equal to the aggregate of any deductible expenditure incurred by that company or any amount taken into account that has the effect of reducing income in the application of section 24JB(2); and

(B)    the amount of that expenditure or reduction is determined directly or indirectly with reference to the dividend in respect of an identical share to that share;

[Subitem (B) substituted by section 16 of Act 25 of 2015 effective on 1 January 2016]

 

: Provided that the deductible expenditure so incurred or the amount of the reduction must be reduced by any amount of income accrued to the company in respect of any distribution in respect of any other share that is an identical share in relation to that share;

[Proviso to item (hh) added by section 16 of Act 25 of 2015 effective on 1 January 2016]

[Item (hh) added by section 19 of Act 22 of 2012 effective on 1 April 2013, deleted by section 194 of Act 31 of 2013 effective on 1 April 2013, and agian item (hh) added by section 23 of Act 31 of 2013 and substituted by section 14 of Act 43 of 2014]

 

(ii)     to any dividend received by or accrued to a person in respect of services rendered or to be rendered or in respect of or by virtue of employment or the holding of any office, other than a dividend received or accrued in respect of a restricted equity instrument as defined in section 8C held by that person or in respect of a share held by that person;

 

(jj)     notwithstanding the provisions of paragraphs (dd) and (ii), to any dividend in respect of a restricted equity instrument as defined in section 8C that was acquired in the circumstances contemplated in section 8C(1) if that dividend constitutes-

(A)    an amount transferred or applied by a company as consideration for the acquisition or redemption of any share in that company;

(B)    an amount received or accrued in anticipation or in the course of the winding up, liquidation, deregistration or final termination of a company; or

(C)    an equity instrument that does not qualify, at the time of the receipt or accrual of that dividend, as a restricted equity instrument as defined in section 8C; or

[Item (jj) added by section 23 of Act 15 of 2016 effective on 1 March 2017 and applies in respect any amount received or accrued on or after that date and substituted by section 16 of Act 17 of 2017 effective on 18 Decemeber 2017]

(kk)   notwithstanding the provisions of paragraphs (dd) and (ii), to any dividend in respect of a restricted equity instrument as defined in section 8C that was acquired in the circumstances contemplated in section 8C(1) if that dividend is derived directly or indirectly from-

(A)    an amount transferred or applied by a company as consideration for the acquisition or redemption of any share in that company; or

(B)    an amount received or accrued in anticipation or in the course of the winding up, liquidation, deregistration or final termination of a company;

[Item (kk) added by section 16 of Act 17 of 2017 effective on 18 December 2017]

Section 11(l) of ITA

Posted on by admin_kmos

(l)      any amount contributed by a person that is an employer during the year of assessment for the benefit of or on behalf of any employee or former employee of the employer or for any dependant or nominee of a deceased employee or former employee of that employer to any pension fund, provident fund or retirement annuity fund in terms of the rules of that fund: Provided that for the purposes of this paragraph a partner in a partnership must be deemed to be an employee of the partnership and a partnership must be deemed to be the employer of the partners in that partnership;

[Paragraph (l) substituted by section 8 of Act 104 of 1979, amended by section 30 of Act 30 of 1998, section 10 of Act 94 of 1983, section 10 of Act 3 of 2008 and section 271 of Act 28 of 2011 and substituted by section 27(1)(l) of Act 31 of 2013 effective on 1 March 2016 (Date of operation in section 27(1)(l) of Act 31 of 2013 as substituted by section 122(1)(b) of Act 43 of 2014) and section 25 of Act 23 of 2018 effective on 1 March 2018]

Section 11(k) of ITA

Posted on by admin_kmos

(k)       ……….

[Paragraph (k) amended by section 8 of Act 72 of 1963, substituted by section 12 of Act 55 of 1966, section 9 of Act 65 of 1973, section 9 of Act 69 of 1975 and section 9 of Act 113 of 1977, amended by section 5 of Act 101 of 1978, section 8 of Act 104 of 1979, section 9 of Act 96 of 1981, section 10 of Act 94 of 1983, section 11 of Act 121 of 1984, section 30 of Act 30 of 1998, section 18 of Act 31 of 2005, section 2 of Act 8 of 2007, section 1 of Act 3 of 2008, section 10 of Act 3 of 2008, section 14 of Act 17 of 2009, substituted by section 27(1)(k) of Act 31 of 2013 (substitution by and date of operation in terms of section 27(1)(k) of Act 31 of 2013 substituted by section 122(1)(a) and (b) of Act 43 of 2014), amended by section 2 of Act 2 of 2016 and section 26 of Act 15 of 2016 and deleted by section 19 of Act 17 of 2017 effective on 1 March 2016]

Section 11(j) of ITA

Posted on by admin_kmos

(j)      an allowance in respect of any debt due to the taxpayer, if that debt would have been allowed as a deduction under any other provision of this Part had that debt become bad, of an amount equal to-

(i)      if IFRS 9 is applied to that debt by that person for financial reporting purposes, other than in respect of lease receivables as defined in IFRS 9 that have not been included in income, the sum of-

(aa)   40 per cent of the aggregate of-

(A)    the loss allowance relating to impairment that is measured at an amount equal to the lifetime expected credit loss, as contemplated in IFRS 9, in respect of debt; and

[Sub-item (A) substituted by section 13(1)(b) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable in respect of years of assessment commencing on or after that date]

(B)    the amounts of debts included in the income of the taxpayer in the current or any previous year of assessment that are disclosed as bad debt written off for financial reporting purposes and that have not been allowed as a deduction under section 11(a) or (i) for the current or any previous year of assessment; and

(bb)   25 per cent of the loss allowance relating to impairment, as contemplated in IFRS 9, in respect of debt other than in respect of debt taken into account under item (aa); or

[Subparagraph (i) amended by section 13(1)(a) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable in respect of years of assessment commencing on or after that date. Item (bb) substituted by section 13(1)(c) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable in respect of years of assessment commencing on or after that date]

(ii)     if IFRS 9 is not applied to that debt by that person for financial reporting purposes, the sum of-

(aa)   40 per cent of so much of any debt, other than a debt contemplated in subparagraph (i), due to the taxpayer, if that debt is 120 days or more in arrears, after taking into account the value of any security in respect of that debt; and

[Item (aa) substituted by section 13(1)(d) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of years of assessment commencing on or after that date]

(bb)   25 per cent of so much of any debt, other than a debt contemplated in subparagraph (i) or item (aa), due to the taxpayer, if that debt is 60 days or more in arrears, after taking into account the value of any security in respect of that debt:

[Item (bb) substituted by section 13(1)(d) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of years of assessment commencing on or after that date]

Provided that an allowance under this paragraph must be included in the income of the taxpayer in the following year of assessment: Provided further that the Commissioner may, on application by a taxpayer, issue a directive that the percentage contemplated in subparagraph (i)(aa) or (ii)(aa) may be increased, to a percentage not exceeding 85 per cent after taking into account-

(a)     the history of a debt owed to that taxpayer, including the number of repayments not met, and the duration of the debt;

(b)     steps taken to enforce repayment of the debt;

(c)     the likelihood of the debt being recovered;

(d)     any security available in respect of that debt;

(e)     the criteria applied by the taxpayer in classifying debt as bad; and

(f)      such other considerations as the Commissioner may deem relevant;

[Paragraph (j) substituted by section 14(1)(e) of Act 89 of 1969, amended by section 10(1)(h) of Act 94 of 1983 and by section 18(c) of Act 31 of 2005 and substituted by section 22(1)(b) of Act 22 of 2012, by section 25(1)(e) of Act 23 of 2018 and by section 15(1)(a) of Act 34 of 2019]