“creditor” means a person to whom a “debtor” owes a “debt”;
[Definition of “creditor” added by section 26(1)(e) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of years of assessment commencing on or after that date]
Category: CHAPTER II – The Taxes (ITA)
Section 6C (ITA) – Solar energy tax credit
6C Solar energy tax credit
(1) In determining the normal tax payable by any natural person, there must, subject to subsection (4), be deducted an amount to be known as the solar energy tax credit, equal to the amount of the rebate determined under subsection (2).
(2)
(a) The solar energy tax credit applies in respect of the cost actually incurred by the natural person-
(i) for the acquisition of any new and unused solar photovoltaic panels, the generation capacity of each being not less than 275W; and
(ii) if the solar photovoltaic panels referred to in subparagraph (i) are brought into use for the first time, by that person on or after 1 March 2023 and before 1 March 2024.
(b) The amount of the solar energy tax credit allowed to the natural person referred to in paragraph (a) must-
(i) be 25 per cent of the actual cost of the solar photovoltaic panels described in paragraph (a); and
(ii) in aggregate be limited to an amount not exceeding R15 000.
(3) A solar energy tax credit will be allowed under subsection (1) only if-
(a) the solar panels are installed and mounted on or affixed to a residence mainly used for domestic purposes by the natural person referred to in subsection (2)(a);
(b) the installation is connected to the distribution board of such residence; and
(c) an electrical certificate of compliance contemplated in the Electrical Installation Regulations, 2009, is issued in respect of the installation referred to in paragraph (a).
(4) No deduction shall be allowed under this section on any asset in respect of which a deduction has been allowed to the taxpayer under section 12B or 12BA.
[Section 6C inserted by section 2(1) of Act 17 of 2023 effective on 1 March, 2023 and applicable in respect of years of assessment commencing on or after that date]
Section 12BA (ITA) – Enhanced deduction in respect of certain machinery, plant, implements, utensils and articles used in production of renewable energy
12BA Enhanced deduction in respect of certain machinery, plant, implements, utensils and articles used in production of renewable energy
(1) In respect of any new and unused machinery, plant, implement, utensil, or article owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by that taxpayer for the purpose of that taxpayer’s trade on or after 1 March 2023 and before 1 March 2025, to be used by that taxpayer or the lessee of that taxpayer, in the generation of electricity in the Republic from-
(a) wind power;
(b) photovoltaic solar energy;
(c) concentrated solar energy;
(d) hydropower; or
(e) biomass comprising organic wastes, landfill gas or plant material,
a deduction calculated in terms of subsection (2) shall be allowed in respect of the year of assessment during which the abovementioned assets are brought into use: Provided that where any machinery, plant, implement, utensil or article for which a deduction is allowed under this subsection is mounted on or affixed to any concrete or other foundation or supporting structure and-
(i) the foundation or supporting structure is designed for such machinery, plant, implement, utensil or article and constructed in such manner that it is or should be regarded as being integrated with the machinery, plant, implement, utensil or article; and
(ii) the useful life of the foundation or supporting structure is or will be limited to the useful life of the machinery, plant, implement, utensil or article mounted thereon or affixed thereto,
the foundation or supporting structure shall be deemed to be part of the machinery, plant, implement, utensil or article mounted thereon or affixed thereto.
(2) The deduction contemplated in subsection (1) is equal to an amount of 125 per cent of the cost incurred by the taxpayer for the acquisition of the asset.
(3) For the purposes of this section, the cost to a taxpayer of any asset acquired by that taxpayer shall be deemed to be the lesser of the actual cost to the taxpayer or the cost which a person would, if that person had acquired the asset under a cash transaction concluded at arm’s length on the date which the transaction for the acquisition of the asset was in fact concluded, have incurred in respect of the direct cost of acquisition of the asset, including the direct cost of the installation or erection thereof.
(4) No deduction shall be allowed under this section in respect of-
(a) any asset the ownership of which is retained by the taxpayer as a seller in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act; or
(b) any asset brought into use after 28 February 2025.
[Section 12BA inserted by section 16(1) of Act 17 of 2023 effective on 1 March, 2023 and applicable in respect of assets brought into use on or after that date]
PART IA (ITA) – Advance Pricing Agreements
“Associated enterprise” definition of section 31 of ITA
“associated enterprise” means an associated enterprise as contemplated in Article 9 of the Model Tax Convention on Income and on Capital of the Organisation for Economic Co-operation and Development;
[Definition of “associated enterprise” inserted by section 37(1)(b) of Act 34 of 2019 effective on 1 January, 2023 and applicable in respect of years of assessment commencing on or after that date (effective date in section 37(2) of Act 34 of 2019 as substituted by section 78(1) of Act 23 of 2020 and by section 66(1) of Act 20 of 2021)]
“Participation rights” definition of section 23M of ITA
“participation rights” means—
(a) the right to participate in all or part of the benefits of the rights (other than voting rights) attaching to a share, or any interest of a similar nature, in a company; or
(b) in the case where no person has any right in that company as contemplated in paragraph (a) or no such rights can be determined for any person, the right to exercise any voting rights in that company;
[Definition of “participation rights” inserted by section 19(1)(g) of Act 20 of 2021 effective on 31 March, 2023 and applicable in respect of years of assessment ending on or after that date (effective date in section 19(2) of Act 20 of 2021 as substituted by section 10 of Act 19 of 2022)]
“Debt” definition of section 23M of ITA
“debt” includes any amount in respect of which interest is determined or incurred, and such amount must be regarded as owed, but does not include a tax debt as defined in section 1(1) of the Tax Administration Act;
[Definition of “debt” inserted by section 19(1)(d) of Act 20 of 2021 effective on 31 March, 2023 and applicable in respect of years of assessment ending on or after that date (effective date in section 19(2) of Act 20 of 2021 as substituted by section 10 of Act 19 of 2022)]
Section 57B (ITA) – Disposal of the right to receive an asset which would otherwise have been acquired in consequence of services rendered or to be rendered
57B. Disposal of the right to receive an asset which would otherwise have been acquired in consequence of services rendered or to be rendered
(1) This section applies where-
(a) a person (“the employee”) has agreed to render services to another person (“the employer”);
(b) the whole or part of the compensation for those services is to be paid by the employer in the form of an asset as defined in paragraph 1 of the Eighth Schedule; and
(c) prior to the employee becoming entitled to that asset, that employee disposes of the right to the asset to another person.
(2) For purposes of this Act, where subsection (1) applies—
(a) that disposal must be disregarded and that employee must be treated as having acquired that asset on the date that it would otherwise have been received by or accrued to him or her for an amount of expenditure equal to the amount included in that employee’s gross income under paragraph (ii) of the proviso to paragraph (c) or under paragraph (i) of the definition of “gross income”; and
(b) that employee must be treated as having disposed of that asset to that other person by way of donation for an amount received or accrued equal to the expenditure contemplated in subsection (2)(a), and that other person must be deemed to have acquired that asset for expenditure equal to that same amount.
[Section 57B inserted by section 32(1) of Act 20 of 2021 effective on 1 March, 2022 and applicable in respect of the disposal of the right to receive an asset on or after that date]
Subsections 2, 3, 4, 5 and 6 of section 29B of ITA
(2) An insurer must be deemed to have disposed of each asset held by that insurer on 29 February 2016, at the close of the day, in respect of all its policyholder funds, other than an asset that constitutes—
(a) an instrument as defined in section 24J(1);
(b) an interest rate agreement as defined in section 24K(1);
(c) a contractual right or obligation the value of which is determined directly or indirectly with reference to-
(i) an instrument contemplated in paragraph (a);
(ii) an interest rate agreement contemplated in paragraph (b);or
(iii) any specified rate of interest;
(d) trading stock; or
(e) a policy of reinsurance.
(3) Where an asset is deemed to have been disposed of by an insurer as contemplated in subsection (2) on the date contemplated in that subsection-
(a) that asset must be deemed to have been so disposed of on that date for an amount received or accrued equal to the market value of the asset on that date; and
(b) that insurer must be deemed to have immediately reacquired that asset at an expenditure equal to the market value contemplated in paragraph (a), which expenditure must be deemed to be an amount of expenditure actually incurred for the purposes of paragraph 20(1)(a) of the Eighth Schedule.
(4) Where an asset is deemed to have been disposed of by an insurer as contemplated in subsection (2) and that asset, in the hands of that insurer, constitutes an asset as defined in paragraph 1 of the Eighth Schedule, that disposal must not be taken into account for the purposes of determining the amount of any allowance or deduction-
(a) to which that insurer may be entitled in respect of that asset; or
(b) that is to be recovered or recouped by or included in the income of that insurer in respect of that asset.
(5)
(a) In addition to any inclusion in any aggregate capital gain or aggregate capital loss of the policyholder funds of an insurer, that insurer must, in respect of each of those policyholder funds, include in the aggregate capital gain or aggregate capital loss of each of those funds for the realisation year and each of the two years of assessment following that realisation year an amount equal to 27.75 per cent of an amount determined in terms of paragraph (b).
[Paragraph (a) substituted by section 9(1)(c) of Act 13 of 2016 deemed effective on 29 February, 2016]
(b) The amount to be determined for the purposes of paragraph (a) is an amount equal to the aggregate of all capital gains and capital losses determined in respect of the disposal of any asset as contemplated in subsection (2).
(c) Where a person ceases to conduct the business of an insurer prior to the expiration of the two years of assessment contemplated in paragraph (a), any amount determined in terms of paragraph (b) must, to the extent that the amount has not been included as contemplated in paragraph (a), be so included in the year of assessment during which the person ceases to conduct the business of an insurer.
[Paragraph (c) added by section 78(1)(d) of Act 31 of 2013 and substituted by section 9(1)(d) of Act 13 of 2016 deemed effective on 29 February, 2016]
(6) This section does not apply to any asset held by an insurer if the asset is administered by a Category III Financial Services Provider and that asset is held by that insurer solely for the purpose of providing a linked policy as defined in the Long-term Insurance Act.
“Realisation year” definition of section 29B of ITA
“realisation year”, in relation to an insurer, means the first year of assessment of that insurer that ends on or after 29 February 2016.
[Definition of “realisation year” substituted by section 9(1)(a) of Act 13 of 2016 deemed effective on 29 February, 2016