Category: CHAPTER II – The Taxes (ITA)

Section 40D (ITA) – Communications licence conversions

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40D.    Communications licence conversions

 

(1)     Where existing licences referred to in Chapter 15 of the Electronic Communications Act, 2005 (Act No. 36 of 2005), are converted to new licences in terms of section 93 of that Act, a licensee of an existing licence or licences must not recover, recoup or include in the licensee’s income for the year of assessment in which that conversion takes place any allowance allowed to the licensee in respect of the existing licence or licences.

 

(2)     The licensee of a new licence contemplated in subsection (1) is deemed to have acquired the new licence-

 

(a)     in the case where an existing licence is converted to a new licence, at a cost equal to the amount taken into account by the licensee in respect of the existing licence;

 

(b)     in the case where two or more existing licences are converted to a new licence, at a cost equal to the aggregate of the amounts taken into account by the licensee in respect of each of the existing licences; and

 

(c)     in the case where an existing licence is converted to two or more new licences, at a cost equal to an amount that bears to the amount taken into account by the licensee in respect of the existing licence the same ratio as the value of that new licence bears to the aggregate value of the new licences, which cost must be treated as expenditure actually incurred by the licensee in respect of the new licence or licences for the purposes of sections 11 and 22(1) and (2).

 

(3)     For the purposes of subsection (2) the new licence or licences must be deemed to have been acquired by the licensee on the day immediately after the conversion.

Section 37C (ITA) – Deductions in respect of environmental conservation and maintenance

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37C.    Deductions in respect of environmental conservation and maintenance

(1)     Expenditure actually incurred by a taxpayer to conserve or maintain land is deemed to be expenditure incurred in the production of income and for purposes of a trade carried on by that taxpayer, if-

(a)     the conservation or maintenance is carried out in terms of a biodiversity management agreement that has a duration of at least five years entered into by the taxpayer in terms of section 44 of the National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004); and

(b)     land utilised by the taxpayer for the production of income and for purposes of a trade consists of, includes or is in the immediate proximity of the land that is the subject of the agreement contemplated in paragraph (a).

(2)

(a)     Any deduction of expenditure contemplated in subsection (1) must not be allowed to the extent that the expenditure exceeds the income of the taxpayer derived from trade carried on by the taxpayer on land utilised as contemplated in subsection (1)(b) in any year of assessment.

(b)     The amount by which the deduction exceeds the income of the taxpayer so derived must be deemed to be expenditure incurred by the taxpayer in the following year of assessment.

(3)     An amount equal to the expenditure actually incurred by a taxpayer to conserve or maintain land owned by the taxpayer is for purposes of section 18A deemed to be a donation by the taxpayer actually paid or transferred during the year to the Government for which a receipt has been issued in terms of section 18A(2), if the conservation or maintenance is carried out in terms of a declaration that has a duration of at least 30 years in terms of section 20, 23 or 28 of the National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003).

(4)     If during the current or any previous year of assessment a deduction is or was allowed to the taxpayer in terms of subsection (1) or (3) in respect of expenditure incurred to conserve or maintain land in terms of an agreement or declaration contemplated in those subsections, and the taxpayer subsequently is in breach of that agreement or violates that declaration, an amount equal to the deductions allowed in respect of expenditure incurred within the period of five years preceding the breach or violation must be included in the income of the taxpayer for the current year of assessment.

(5)       ……….

[Subsection (5) amended by section 86 of Act 31 of 2013, deleted by section 52 of Act 43 of 2014 effective on 1 March 2015]

(6)     ……….

[Subsection (6) deleted by section 52 of Act 43 of 2014 effective on 1 March 2015]

(7)     ……….

[Subsection (7) deleted by section 52 of Act 43 of 2014 effective on 1 March 2015]

PART III – Special rules relating to asset-for-share transactions, substitutive share-for-share transactions, amalgamation transactions, intra-group transactions, unbundling transactions and liquidation transactions (ITA)

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PART III

Special rules relating to asset-for-share transactions, substitutive share-for-share transactions, amalgamation transactions, intra-group transactions, unbundling transactions and liquidation distributions

“Company” definition of section 41 of ITA

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“company” does not include a headquarter company and, for the purposes of sections 42 and 44, includes any portfolio of a collective investment scheme in securities or any portfolio of a hedge fund collective investment scheme;

[Definition of “company” inserted by section 47 of Act 17 of 2009 and substituted by section 67 of Act 24 of 2011 and section 61 of Act 25 of 2015 effective on 1 April 2015]

Section 33 (ITA) – Assessment of owners or charterers of ships or aircraft who are not residents of the Republic

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33.  Assessment of owners or charterers of ships or aircraft who are not residents of the Republic

 

(1)     Any person other than a resident who embarks passengers or loads livestock, mails or goods in the Republic, as an owner or charterer of any ship or aircraft, shall be deemed to have derived therefrom (apart from any taxable income derived by him from other sources) a taxable income of 10 per cent of the amount payable to him or to any agent on his behalf, whether the amount be payable in or outside the Republic, in respect of passengers, livestock, mails and goods so embarked or loaded, but the provisions of this section shall not apply to any such person who renders accounts which satisfactorily disclose the taxable income derived by him from the embarking of passengers or the loading of livestock, mails and goods as aforesaid.

 

(2)     Where the person so embarking passengers or loading livestock, mails or goods has no recognized agent in the Republic other than the master of the ship or the pilot of the aircraft in connection with which any such amounts are payable, or where the agent fails to make returns of any such amounts payable in respect of any ship or aircraft –

 

(a)     the Commissioner may make the assessment from such information as may be available to him;

 

(b)     the tax thereon shall be payable to the Commissioner prior to the clearance of the ship or aircraft;

 

(c)     the principal officer of customs at the port or airport where such ship or aircraft is being cleared shall have power to detain the clearance until such payment is made; and

 

(d)     upon such payment the master, pilot or agent (as the case may be) shall be entitled to a certificate from such officer of customs that the amount so paid has been paid under the provisions of this Act, and such certificate shall be sufficient warrant to such master, pilot or agent of the amount so paid.

Section 37F (ITA) – Determination of taxable income derived by persons previously assessable under certain other laws

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37F.  Determination of taxable income derived by persons previously assessable under certain other laws

 

Where it is necessary for any rule provided in this Act as to the inclusion in the income of any taxpayer for any year or as to the deduction or set–off of any amount from or against his income for such year, that regard shall be had to anything that has been done or has occurred in or in relation to a previous year of assessment, anything that has in fact been done or has in fact occurred in or in relation to a year of assessment during which the taxpayer was assessable for taxation purposes in terms of any law of a former self–governing territory declared under section 26 of the repealed Self–governing Territories Constitution Act, 1971 (Act No. 21 of 1971), to be a self–governing territory or of the former Republic of Transkei, Bophuthatswana, Venda or Ciskei for any year of assessment, shall, subject to such adjustments as may in the circumstances be appropriate, for the purposes of applying such rule be taken into account.

Section 35A (ITA) – Withholding of amounts from payments to non-resident sellers of immovable property

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35A.  Withholding of amounts from payments to non-resident sellers of immovable property

(1)     Any person (hereinafter referred to as ‘the purchaser’) who must pay any amount to any other person who is not a resident (hereinafter referred to as ‘the seller’), or to any other person for or on behalf of that seller, in respect of the disposal by that seller of any immovable property in the Republic must, subject to subsection (2), withhold from the amount which that person must so pay, an amount equal to-

(a)     7,5 per cent of the amount so payable, in the case where the seller is a natural person;

[Paragraph (a) substituted by section 10 of Act 14 of 2017 effective on 22 February 2017, applies in respect of any disposal on or after that date]

(b)     10 per cent of the amount so payable, in the case where the seller is a company;

[Paragraph (b) substituted by section 10 of Act 14 of 2017 effective on 22 February 2017, applies in respect of any disposal on or after that date and amended by section 47 of Act 17 of 2017 effective on 18 December 2017]

(c)     15 per cent of the amount so payable, in the case where the seller is a trust; and

[Paragraph (c) substituted by section 10 of Act 14 of 2017 effective on 22 February 2017, applies in respect of any disposal on or after that date and amended by section 47 of Act 17 of 2017 effective on 18 December 2017]

(d)     a percentage of the amount so payable as the Minister may announce in the national annual budget contemplated in section 27(1) of the Public Finance Management Act, with effect from a date mentioned in that Announcement.

[Paragraph (d) added by section 47 of Act 17 of 2017 effective on 18 December 2017]

(1A)   If the Minister makes an announcement contemplated in subsection (1)(d), that rate comes into effect on the date determined by the Minister in that announcement and continues to apply for a period of 12 months from that date subject to Parliament passing legislation giving effect to that announcement within that period of 12 months.

[Subsection (1A) inserted by section 47 of Act 17 of 2017 effective on 18 December 2017]

(2)     The seller may apply to the Commissioner, in the form and at the place as the Commissioner may determine, for a directive that no amount or a reduced amount be withheld by the purchaser in terms of subsection (1) solely having regard to-

 

(a)     any security furnished for the payment of any tax due on the disposal of the immovable property by the seller;

 

(b)     the extent of the assets of the seller in the Republic;

 

(c)     whether that seller is subject to tax in respect of the disposal of the immovable property; and

 

(d)     whether the actual liability of that seller for tax in respect of the disposal of the immovable property is less than the amount contemplated in subsection (1).

(3)    

(a)     The amount withheld from any payment to the seller in terms of subsection (1) is an advance in respect of that seller’s liability for normal tax for the year of assessment during which that property is disposed of by that seller.

 [Subsection renumbered as paragraph (a) by section 2 of Act 23 of 2015 effective on 8 January 2016]

(b)     If the seller does not submit a return in respect of that year of assessment within 12 months after the end of that year of assessment, the payment of the amount in terms of subsection (4) is a sufficient basis for an assessment in terms of section 95 of the Tax Administration Act.

[Paragraph (b) added by section 2 of Act 23 of 2015 and substituted by section 2 of Act 16 of 2016]

(4)     The amount withheld by a purchaser in terms of subsection (1), must be paid to the Commissioner-

 

(a)     where that purchaser is a resident, within 14 days after the date on which that amount was so withheld; or

 

(b)     where that purchaser is not a resident, within 28 days after the date on which that amount was so withheld.


(5)     If an amount has been withheld in terms of subsection (1) from any amount payable in a foreign currency, that amount so withheld must be translated to the currency of the Republic at the spot rate on the date that the amount is paid to the Commissioner.

(6)     The purchaser must, together with the payment contemplated in subsection (4), submit to the Commissioner a return.

(7)     A purchaser is person ally liable under the circumstances contemplated in section 157 of the Tax Administration Act, for the amount that must be withheld under subsection (1) only if the purchaser knows or should reasonably have known that the seller is not a resident and must pay that amount to the Commissioner not later than the date on which payment should have been made if the amount had in fact been withheld.

(8)     Subsection (7) does not apply if a property practitioner or conveyancer assists in the disposal of the immovable property and that property practitioner or conveyancer fails to notify the purchaser as contemplated in subsection (11).

[Subsection (8) substituted by section 33(a) by Act 17 of 2023]


(9)     If a purchaser fails to pay any amount contemplated in subsection (1) to the Commissioner within the period allowed for payment in terms of subsection (4), that purchaser must pay a penalty equal to ten per cent of the amount, in addition to any other penalty or charge for which he or she may be liable under this Act.

[Subsection (9) substituted by section 271 read with paragraph 43(c) of Schedule 1 of Act 28 of 2011 effective on 1 October, 2012 except to the extent that it relates to interest under this Act: Proclamation No. 51 in Government Gazette 35687 of 14 September, 2012]

[Subsection (9) substitution by section 271 read with paragraph 43(c) of Schedule 1 of Act 28 of 2011 has only partially commenced to the extent that the amendment relates to the penalty and not to the extent it relates to interest]

(9)     If a purchaser fails to pay any amount contemplated in subsection (1) to the Commissioner within the period allowed for payment in terms of subsection (4), that purchaser-

 

(a)     is liable for interest at the prescribed rate on any amount outstanding calculated from the day following the last date for payment to the date that the amount is received by the Commissioner; and

 

(b)     must pay a penalty equal to ten per cent of that amount, in addition to any other penalty or charge for which he or she may be liable under this Act.

(10)     ……….

(11)   Any property practitioner and any conveyancer who is entitled to any remuneration or other payment in respect of services rendered in connection with the disposal of the immovable property by the seller or the registration of transfer, as the case may be, must before any payment is made to the seller each notify the purchaser in writing of the fact that the seller is not a resident and that the provisions of this section may apply.

[Subsection (11) substituted by section 33(b) by Act 17 of 2023]

(12)   If a property practitioner or conveyancer knows or should reasonably have known that the seller is not a resident and fails to comply with subsection (11), that failing Property practitioner or conveyancer is jointly and severally liable for the payment of the amount which the purchaser is required to withhold and pay to the Commissioner in terms of this section, but limited to the amount of remuneration or other payment in respect of the services rendered in connection with the disposal of the immovable property by the seller or the registration of transfer, as the case may be.

[Subsection (12) substituted by section 33(c) by Act 17 of 2023]

(13)   The property practitioner or conveyancer who paid an amount in terms of subsection (12) is deemed to be a withholding agent for purposes of the Tax Administration Act.

[Subsection (13) substituted by section 271 read with paragraph 43(e) of Schedule 1 of Act 28 of 2011 and by section 33(d) by Act 17 of 2023]

(14)   This section does not apply-

 

(a)     if the amounts payable by the purchaser to the seller and to any other person for or on behalf of the seller, in respect of the acquisition by that purchaser of the immovable property, in aggregate do not exceed R2 million; or

 

(b)     in respect of any deposit paid by a purchaser for purposes of securing the disposal of the immovable property by the seller to that purchaser, until the agreement for that disposal has become unconditional, in which case any amount which would have been required to be withheld from the amount of that deposit, must be withheld from the first following payments made by that purchaser in respect of that disposal.

[Paragraph (b) substituted by section 57 of Act 25 of 2015 effective on 8 January 2016]

(15)   For purposes of this section-

‘conveyancer’ means a ‘conveyancer’ as defined in section 102 of the Deeds Registries Act, 1937 (Act No. 47 of 1937);

“estate agent”     . . . . . . 

[Definition of “estate agent” deleted by section 33(e) of Act 17 of 2023]

 

‘foreign currency’ means any currency other than the currency of the Republic;

 

“immovable property” means immovable property contemplated in paragraph 2(1)(b)(i) and (2) of the Eighth Schedule; and

[Definition of “immovable property” substituted by section 33(f) of Act 17 of 2023]

“property practitioner” means a property practitioner as defined in section 1 of the Property Practitioners Act, 2019 (Act 22 of 2019).

[Definition of “property practitioner” added by section 33(g) of Act 17 of 2023]