“South African ship” definition of section 12Q of ITA

Posted on May 3, 2016May 27, 2020 by admin_kmos

“South African ship” means a ship-

(a) which is registered in the Republic in accordance with Part 1 of Chapter 4 of the Ship Registration Act, 1998 (Act No. 58 of 1998); or

(b) another ship or ships used temporarily in lieu of the ship contemplated in paragraph (a) by virtue of that ship being subject to repair or maintenance.

[Definition of” South African ship” substituted by section 27 of Act 25 of 2015 and section 31 of Act 23 of 2018 effective on 1 April 2019, applies in respect of years of assessment commencing on or after that date.]

“International shipping company” definition of section 12Q of ITA

Posted on May 3, 2016June 19, 2019 by admin_kmos

‘international shipping company’ means a company that is a resident that operates one or more South African ships that are utilised in international shipping;

[Definition of “international shipping company” substituted by section 29 of Act 17 of 2017 effective on 18 December 2017]

“International shipping” definition of section 12Q of ITA

Posted on May 3, 2016June 19, 2019 by admin_kmos

(1) For the purposes of this section-

‘international shipping’ means the conveyance for compensation of passengers or goods by means of the operation of a South African ship mainly engaged in international traffic;

Section 8B (ITA) – Taxation of amounts derived from broad-based employee share plan

Posted on October 15, 2015April 6, 2021 by admin_kmos

8B. Taxation of amounts derived from broad-based employee share plan

(1) Notwithstanding section 9C, there must be included in the income of a person for a year of assessment any gain made by that person during that year from the disposal of any qualifying equity share or any right or interest in a qualifying equity share, which is disposed of by that person within five years from the date of grant of that qualifying equity share, otherwise than –

(a) in exchange for another qualifying equity share as contemplated in subsection (2);

(b) on the death of that person; or

(2) If a person disposes of a qualifying equity share in exchange solely for any other equity share in that employer or any company that is an associated institution as defined in the Seventh Schedule in relation to that employer, that other equity share acquired in exchange is deemed to be-

(a) a qualifying equity share which was acquired by that person on the date of grant of the qualifying equity share disposed of in exchange; and

(b) acquired for a consideration equal to any consideration given for the qualifying equity share disposed of in exchange.

(2A) If a person acquires any equity share by virtue of any qualifying equity share held by that person, that other equity share so acquired is deemed to be a qualifying equity share which was acquired by that person on the date of grant of the qualifying equity share so held by that person.

(2B) If a person disposes of any right or interest in a qualifying equity share, the amount of consideration incurred in respect of the acquisition of that qualifying equity share that is attributable to that right or interest must be determined in accordance with the ratio that the amount received for the disposal of that right or interest bears to the market value of that qualifying equity share immediately before that disposal.

“Market value” definition of section 8B of ITA

Posted on October 15, 2015February 9, 2019 by admin_kmos

‘market value’ in relation to an equity share means the price which could be obtained upon the sale of that equity share between a willing buyer and a willing seller dealing freely at arm’s length in an open market and without having regard to any restrictions imposed in respect of that equity share;

“Gain” definition of section 8B of ITA

Posted on October 15, 2015February 9, 2019 by admin_kmos

‘gain’ in relation to the disposal by a person of a qualifying equity share or a right or interest in a qualifying equity share, means the amount by which any amount received by or accrued to that person from that disposal exceeds the consideration given by him or her for that qualifying equity share, right or interest (otherwise than in the form of services rendered or to be rendered or anything done or to be done or not to be done);

“Date of grant” definition of section 8B of ITA

Posted on October 15, 2015February 9, 2019 by admin_kmos

“date of grant” in relation to an equity share means the date on which the granting of that equity share is approved by the directors of the employer company or some other person or body of persons with comparable authority;

Section 6 (ITA) – Normal tax rebates

Posted on October 15, 2015January 10, 2024 by admin_kmos

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]

Section 8C (ITA) – Taxation of directors and employees on vesting of equity instruments

Posted on October 15, 2015February 9, 2019 by admin_kmos

8C. Taxation of directors and employees on vesting of equity instruments

(1)

(a) Notwithstanding section sections 9C and 23(m), a taxpayer must include in or deduct from his or her income for a year of assessment any gain or loss determined in terms of subsection (2) in respect of the vesting during that year of any equity instrument, if that equity instrument was acquired by that taxpayer –

[Words preceding subparagraph (i) substituted by section 6 of Act 43 of 2014 effective on 20 January 2015]

(i) by virtue of his or her employment or office of director of any company or from any person by arrangement with the taxpayer’s employer;

(ii) by virtue of any restricted equity instrument held by that taxpayer in respect of which this section will apply upon vesting thereof; or

(iii) as a restricted equity instrument during the period of his or her employment by or office of director of any company from-

(aa) that company or any associated institution in relation to that company; or

(bb) any person employed by or that is a director of-

(A) that company; or

(B) any associated institution in relation to that company.

(b) This section does not apply in respect of any equity instrument which –

(i) was acquired by the exercise or conversion of, or in exchange for the disposal of, any other equity instrument where this section applied in respect of the vesting of that other equity instrument before that exercise, conversion or exchange; or

(ii) constitutes a qualifying equity share contemplated in section 8B.

(1A) A taxpayer must include any amount received by or accrued to him or her during a year of assessment in respect of a restricted equity instrument in his or her income for that year of assessment if that amount does not constitute-

(a) a return of capital or foreign return of capital by way of a distribution of a restricted equity instrument;

(b) a dividend or foreign dividend in respect of that restricted equity instrument; or

(c) an amount that must be taken into account in determining the gain or loss, in terms of this section, in respect of that restricted equity instrument.

[Subsection (1A) inserted by section 11 of Act 60 of 2008, substituted by section 12 of Act 7 of 2010, section 19 of Act 24 of 2011 and section 13 of Act 15 of 2016 effective on 1 March 2017, applies in respect of amounts received or accrued on or after that date]

(2)

(a) The gain to be included in the income of a taxpayer –

(i) in the case of –

(aa) a disposal contemplated in subsection (5)(c); or

(bb) a disposal by way of release, abandonment or lapse of an option or financial instrument contemplated in paragraph (a) or (b) of the definition of ‘equity instrument’,

is the amount received or accrued in respect of that disposal which exceeds the sum of any consideration in respect of that equity instrument; or

(ii) in any other case, is the amount by which the market value of the equity instrument determined at the time that it vests in that taxpayer exceeds the sum of any consideration in respect of that equity instrument.

(b) The loss to be deducted from the income of a taxpayer –

(i) in the case of –

(aa) a disposal contemplated in subsection (5)(c); or

(bb) a disposal by way of release, abandonment or lapse of an option or financial instrument contemplated in paragraph (a) or (b) of the definition of ‘equity instrument’,

is the amount by which the sum of any consideration in respect of that equity instrument exceeds the amount received or accrued in respect of that disposal; or

(ii) in any other case, is the amount by which the consideration in respect of the equity instrument exceeds the market value of that equity instrument determined at the time that it vests in that taxpayer.

(3) An equity instrument acquired by a taxpayer is deemed for the purposes of this section to vest in that taxpayer –

(a) in the case of the acquisition of an unrestricted equity instrument, at the time of that acquisition; or

(b) in the case of the acquisition of a restricted equity instrument, at the earliest of –

(i) when all the restrictions, which result in that equity instrument being a restricted equity instrument, cease to have effect;

(ii) immediately before that taxpayer disposes of that restricted equity instrument, other than a disposal contemplated in subsection (4) or (5)(a), (b) or (c);

(iii) immediately after that equity instrument, which is an option contemplated in paragraph (a) of the definition of ‘equity instrument’ or a financial instrument contemplated in paragraph (b) of that definition, terminates (otherwise than by the exercise or conversion of that equity instrument);

(iv) immediately before that taxpayer dies, if all the restrictions relating to that equity instrument are or may be lifted on or after death; and

(v) the time a disposal contemplated in subsection (2)(a)(1) or (b)(i) occurs.

(4)

(a) If a taxpayer disposes of a restricted equity instrument which was acquired in the manner contemplated in subsection (1) for an amount which consists of or includes any other restricted equity instrument in the employer of the taxpayer or an associated institution in relation to the employer, that other restricted equity instrument acquired in exchange is deemed to be acquired by that taxpayer by virtue of his or her employment or office of director of any company.

(b) If the amount received or accrued in respect of the restricted equity instrument which is disposed of as contemplated in paragraph (a) includes any payment in a form other than restricted equity instruments, that payment less any consideration attributable to that payment must be deemed to be a gain or loss which must be included in or deducted from the income of the taxpayer in the year of assessment during which that restricted equity instrument is so disposed of.

(5)

(a) If a restricted equity instrument which was acquired by a taxpayer in the manner contemplated in subsection (1) is disposed of by that taxpayer to any person –

(i) otherwise than by or under a disposal made in terms of a transaction at arm’s length; or

(ii) who is a connected person in relation to that taxpayer, the provisions of subsections (2), (3) and (4) apply mutatis mutandis in the determination of any gain or loss made by that person as if that person had been the taxpayer, and that gain or loss is for purposes of subsection (1) deemed to be made by that taxpayer in respect of the vesting of that equity instrument.

(b) If an equity instrument was acquired by any person other than the taxpayer by virtue of the taxpayer’s employment or office of director, that equity instrument must, for purposes of this section, be deemed to have been so acquired by that taxpayer and disposed of to that person in the manner contemplated in paragraph (a).

(c) Paragraph (a) does not apply where a taxpayer disposes of any restricted equity instrument (including by way of forfeiture, lapse or cancellation) to his or her employer, an associated institution or other person by arrangement with the employer in terms of a restriction imposed in relation to that equity instrument for an amount which is less than the market value of that restricted equity instrument.

(6) If a person who acquires a restricted equity instrument from the taxpayer as contemplated in subsection (5), disposes of that restricted equity instrument to any other person in the manner contemplated in subsection (5)(a)(i) or to a connected person in relation to the taxpayer, subsection (5) applies in respect of that other person as if he or she had acquired that restricted equity instrument directly from that taxpayer.

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

Posted on October 15, 2015May 27, 2020 by admin_kmos

(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-

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

(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]

KMOS

Category: CHAPTER II – The Taxes (ITA)

“South African ship” definition of section 12Q of ITA

“International shipping company” definition of section 12Q of ITA

“International shipping” definition of section 12Q of ITA

“Market value” definition of section 8B of ITA

“Gain” definition of section 8B of ITA

“Date of grant” definition of section 8B of ITA

Section 6 (ITA) – Normal tax rebates

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