Category: CHAPTER II – The Taxes (ITA)

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 10(1)(q) of ITA

Posted on by admin_kmos

(q)     any bona fide scholarship or bursary, other than any scholarship or bursary contemplated in paragraph (qA), granted to enable or assist any person to study at a recognized educational or research institution: Provided that if any such scholarship or bursary has been so granted by an employer or an associated institution (as respectively defined in paragraph 1 of the Seventh Schedule) to an employee (as defined in the said paragraph) or to a relative of such employee, the exemption under this paragraph shall not apply –

[Words preceding the proviso substituted by section 16 of Act 17 of 2017 effective on 1 March 2018 and applies in respect of years of assessment commencing on or after that date]

(i)      in the case of a scholarship or bursary granted to so enable or assist any such employee, unless the employee agrees to reimburse the employer for any scholarship or bursary granted to that employee if that employee fails to complete his or her studies for reasons other than death, ill-health or injury;

(ii)     in the case of a scholarship or bursary granted to enable or assist any such relative of an employee so to study –

(aa)   if the remuneration proxy derived by the employee in relation to a year of assessment exceeded R600 000;

[Sub-paragraph (aa) amended by section 1(2)(c) of Act 3 of 2008, substituted by section 23(1)(t) of Act 31 of 2013, by section 23(1)(e) of Act 15 of 2016 and by section 7(1)(a) of Act 14 of 2017 and amended by section 10(1)(b) of Act 23 of 2020 effective on 1 March, 2021 and applicable in respect of years of assessment commencing on or after that date]

(bb)   to so much of any scholarship or bursary contemplated in this subparagraph as in the case of any such relative, during the year of assessment, exceeds-

(A)    R20 000 in respect of-

[Words preceding subsubitem (AA) substituted by section 23 of Act 15 of 2016 and section 7 of Act 14 of 2017 effective on 1 March 2017, applies in respect of years of assessment commencing on or after that date]

(AA)  grade R to grade twelve as contemplated in the definition of ‘school’ in section 1 of the South African Schools Act, 1996 (Act No. 84 of 1996); or

(BB)  a qualification to which an NQF level from 1 up to and including 4 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008);

[Subitem (A) substituted by section 16 of Act 25 of 2015 effective on 1 March 2013]

(B)    R60 000 in respect of a qualification to which an NQF level from 5 up to and including 10 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act 67 of 2008); and

[Sub-paragraph (bb) amended by section 1(2)(c) of Act 3 of 2008, substituted by section 23(1)(t) of Act 31 of 2013 and amended by section 10(1)(b) of Act 23 of 2020 effective on 1 March, 2021 and applicable in respect of years of assessment commencing on or after that date] 

[Item (B) substituted by section 23(1)(g) of Act 15 of 2016 and by section 7(1)(c) of Act 14 of 2017 deemed effective on 1 March, 2017 and applicable in respect of years of assessment commencing on or after that date]

(cc)   if any remuneration to which the employee was entitled or might in the future have become entitled was in any manner whatsoever reduced or forfeited as a result of the grant of such scholarship or bursary;

[Sub-paragraph (cc) added by section 10(1)(b) of Act 23 of 2020 effective on 1 March, 2021 and applicable in respect of years of assessment commencing on or after that date]

[Paragraph (q) deleted by section 12(1)(i) of Act 129 of 1991, inserted by section 10(1)(p) of Act 141 of 1992, amended by section 10(1)(f) of Act 28 of 1997, by section 13(1)(c) and (d) of Act 30 of 2002 and substituted by section 10(1)(o) of Act 20 of 2006 and amended by section 16(1)(h) of Act 17 of 2017 effective on 1 March, 2018 and applicable in respect of years of assessment commencing on or after that date] 

“Annuity contract” definition of section 10A of ITA

Posted on by admin_kmos

“annuity contract” means an agreement concluded between an insurer in the course of his insurance business and a purchaser, in terms of which –

 

(a)     the insurer agrees to pay to the purchaser or the purchaser’s spouse or surviving spouse an annuity or annuities (whether to one such person or to each of them) until the death of the annuitant or the expiry of a specified term;

 

(b)     the purchaser agrees to pay to the insurer a lump sum cash consideration for such annuity or annuities; and

 

(c)     no amounts are or will be payable by the insurer to the purchaser or any other person other than amounts payable by way of such annuity or annuities or, where an annuity is payable for a minimum term and such annuity is in the event of the death of the annuitant before the end of such term to continue to be payable to some third person for the balance of that term, amounts which may be so payable to such third person by way of such annuity,

 

but does not include any agreement for the payment by any insurer of any annuity which is under the rules of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund payable to a member of such fund or to any other person;

Section 11(d) of ITA

Posted on by admin_kmos

(d)     expenditure actually incurred during the year of assessment on repairs of property occupied for the purpose of trade or in respect of which income is receivable, including any expenditure so incurred on the treatment against attack by beetles of any timber forming part of such property and sums expended for the repair of machinery, implements, utensils and other articles employed by the taxpayer for the purposes of his trade;