Section 64FA (ITA) – Exemption from and reduction of tax in respect of dividends in specie

Posted on October 15, 2015January 13, 2024 by admin_kmos

64FA. Exemption from and reduction of tax in respect of dividends in specie

(1) Where a company declares and pays a dividend that consists of a distribution of an asset in specie, that dividend is exempt from the dividends tax to the extent that it constitutes a distribution of an asset in specie if-

(a) the person to whom the payment is made has, before the dividend is paid, submitted to the company-

(i) a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been exempt from the dividends tax in terms of section 64F or an agreement for the avoidance of double taxation; and

[Subparagraph (i) substituted by section 17 of Act 20 of 2022]

(ii) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the exemption applicable to the beneficial owner referred to in subparagraph (i) change or the beneficial owner cease to be a beneficial owner;

[Paragraph (a) amended by section 87(1)(a) of Act 22 of 2012 and by section 6(1)(a) of Act 33 of 2019]

(b) the beneficial owner forms part of the same group of companies, as defined in section 41, as that company;

(d) the dividend constitutes a disposal as contemplated in paragraph 67B(2) of the Eighth Schedule.

(2) A company that declares and pays a dividend that consists of a distribution of an asset in specie is liable for the dividends tax at a reduced rate in respect of the portion of the dividend that constitutes the distribution of an asset in specie if the person to whom the payment is made has, before the dividend is paid, submitted to the company—

(a) a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and

(b) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the reduced rate applicable to the beneficial owner referred to in paragraph (a) change or the beneficial owner cease to be the beneficial owner.

[Subsection (2) amended by section 6(1)(b) of Act 33 of 2019. Paragraph (b) substituted by section 87(1)(e) of Act 22 of 2012 deemed effective on 1 April, 2012]

(3) A declaration and written undertaking submitted in terms of subsection (1)(a) or (2) are no longer valid after a period of five years from the date of the declaration, unless the company that is making the payment is subject to the provisions of-

(a) the Financial Intelligence Centre Act, 2001 (Act 38 of 2001);

(b) the Agreement Between the Government of the Republic of South Africa and the Government of the United States of America to improve International Tax Compliance and to Implement the US Foreign Account Tax Compliance Act; or

(c) the regulations for purposes of paragraph (a) of the definition of “international tax standard” in section 1 of the Tax Administration Act,

with regard to the person to whom the payment is made and takes account of these provisions in monitoring the continued validity of the declaration.

[Subsection (3) added by section 6(1)(c) of Act 33 of 2019 effective on 1 July, 2020]

“Month” definition of Fourth Schedule

Posted on October 15, 2015May 25, 2017 by admin_kmos

“month” means any of the twelve portions into which any calendar year is divided;

“Labour broker” definition of Fourth Schedule

Posted on October 15, 2015May 25, 2017 by admin_kmos

“labour broker” means any natural person who conducts or carries on any business whereby such person for reward provides a client of such business with other persons to render a service or perform work for such client, or procures such other persons for the client, for which services or work such other persons are remunerated by such person;

“Employer” definition of Fourth Schedule

Posted on October 15, 2015May 25, 2017 by admin_kmos

“employer” means any person (excluding any person not acting as a principal, but including any person acting in a fiduciary capacity or in his capacity as a trustee in an insolvent estate, an executor or an administrator of a benefit fund, pension fund, pension preservation fund, provident fund, provident preservation fund, retirement annuity fund or any other fund) who pays or is liable to pay to any person any amount by way of remuneration, and any person responsible for the payment of any amount by way of remuneration to any person under the provisions of any law or out of public funds (including the funds of any provincial council or any administration or undertaking of the State) or out of funds voted by Parliament or a provincial council;

“Employees’ tax certificate” definition of Fourth Schedule

Posted on October 15, 2015September 7, 2024 by admin_kmos

“employees’ tax certificate” means a certificate required to be issued by an employer in terms of paragraph 13;

“Employees’ tax” definition of Fourth Schedule

Posted on October 15, 2015May 25, 2017 by admin_kmos

“employees’ tax” means the tax required to be deducted or withheld by an employer in terms of paragraph 2 from remuneration paid or payable to an employee;

“Employee” definition of Fourth Schedule

Posted on October 15, 2015April 5, 2021 by admin_kmos

For the purposes of this Schedule, unless the context otherwise indicates –

“employee” means –

(a) any person (other than a company) who receives any remuneration or to whom any remuneration accrues;

(b) any person who receives any remuneration or to whom any remuneration accrues by reason of any services rendered by such person to or on behalf of a labour broker;

[Paragraph (c) amended by section 6 of Act 23 of 2015 effective on 8 January 2016]

(d) any person or class or category of person whom the Minister of Finance by notice in the Gazette declares to be an employee for the purposes of this definition;

[Paragraph (d) amended by section 66 of Act 60 of 2008 effective on1 March 2009 and section 6 of Act 23 of 2015 effective on 8 January 2016]

(e) any personal service provider; or

[Paragraph (e) added by section 52 of Act 30 of 2000, substituted by section 66 of Act 60 of 2008 effective on 1 March 2009 and amended by section 6 of Act 23 of 2015 effective on 8 January 2016]

(f) ………..

(g) ……….

[Paragraph (g) added by section 19 of Act 19 of 2001 and deleted by section 4 of Act 22 of 2018 effective on 1 March 2019, applies to years of assessment commencing on or after that date]