4.    Foreign currency gains or losses

(1)     Currency gains or losses of an oil and gas company during any year of assessment (regardless of whether those gains or losses are realised or unrealised) must be determined solely with reference to-

(a)     the functional currency of that company; and

(b)     the translation method used by that company for purposes of financial reporting.

(2)     Any amount received by or accrued to, or expenditure incurred by, an oil and gas company during any year of assessment in any currency other than that of the Republic must be-

(a)     determined in the functional currency of that company; and

(b)     translated to the currency of the Republic by applying the average exchange rate for that year.

3.    Withholding taxes

 

(1)     The rate of dividends tax contemplated in section 64E that is paid by an oil and gas company on the amount of any dividend derived from oil and gas income must not exceed zero per cent of the amount of that dividend.

 

(2)     Notwithstanding subparagraph (1), the rate of dividends tax may not exceed 0 per cent of the amount of any dividend, as defined in section 64D, that is paid by any oil and gas company out of amounts attributable to its oil and gas income if all of its oil and gas rights are solely derived (directly or indirectly) by virtue of an OP26 right as defined in Schedule II of the Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002), previously held by that company.

2.     Rate

The rate of tax on taxable income attributable to oil and gas income of any oil and gas company must not exceed 28 cents on each rand of taxable income.

‘oil and gas income’ means the receipts and accruals derived by an oil and gas company from –

 

(a)     exploration in terms of any oil and gas right;

 

(b)     post-exploration in respect of any oil and gas right; or

 

(c)     the leasing or disposal of any oil and gas right;