Category: CHAPTER II – The Taxes (ITA)

Section 37G (ITA) – Determination of taxable income derived from small business undertakings

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37G.    Determination of taxable income derived from small business undertakings

(1)     The Minister of Finance may make regulations to facilitate compliance with the provisions of this Act by natural persons who carry on business through small business undertakings, whether as sole proprietors or in partnership with other natural persons.

(2)     A regulation made under subsection (1) may –

(a)     prescribe what shall constitute a small business undertaking, having regard to –

(i)      the nature of the undertaking;

(ii)     the turnover, taxable income or profit of the undertaking;

(iii)    the number of persons employed in the undertaking;

(iv)    the nature and extent of other income derived by the proprietor or partners; and

(v)     any other feature which, in the opinion of the said Minister, indicates that an undertaking should be regarded as a small business undertaking;

(b)     provide for the variation of any provision of this Act relating to the determination of the taxable income derived from a small business undertaking, including –

(i)      the determination of taxable income having regard only to amounts actually received or expended;

(ii)     any variation in the manner in which the values of trading stock are taken into account;

(iii)    the manner in which expenditure of a capital nature incurred is to be treated; and

(iv)    any other provision which, save in so far as the timing of the receipt or accrual of income or the incurral of expenditure is concerned, will not result in a material variation in the determination of the taxable income derived by the undertaking over a period of time;

(c)     provide for the exemption from, or extension of time limits in, any provision of this Act relating to the preparation and submission of documents, accounts, returns or payments;

(d)     make such other provision as in the opinion of the said Minister will facilitate the carrying on of small business undertakings.


37H.      ……….

Section 36 (ITA) – Calculation of redemption allowance and unredeemed balance of capital expenditure in connection with mining operations

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 36.   Calculation of redemption allowance and unredeemed balance of capital expenditure in connection with mining operations

(1)     ……….

(2)     ……….

(3)     ……….

(4)     ……….

(5)     ……….

(6)     ……….

(7)     ……….

(7A)  ………..

(7B)   ……….

(7C)   Subject to the provisions of subsections (7E), (7F) and (7G), the amounts to be deducted under section 15(a) from income derived from the working of any producing mine shall be the amount of capital expenditure incurred.

(7D)  ………..

(7E)  The aggregate of the amounts of capital expenditure determined under subsection (7C) in respect of any year of assessment in relation to any mine or mines shall not exceed the taxable income (as determined before the deduction of any amount allowable under section 15(a), but after the set–off of any balance of assessed loss incurred by the taxpayer in relation to such mine or mines in any previous year which has been carried forward from the preceding year of assessment) derived by the taxpayer from mining, and any amount by which the said aggregate would, but for the provisions of this subsection, have exceeded such taxable income as so determined, shall be carried forward and be deemed to be an amount of capital expenditure incurred during the next succeeding year of assessment in respect of the mine or mines to which such capital expenditure relates.

(7EA) Subject to paragraph 12A(6)(a) to (d) and (f) of the Eighth Schedule, where a debt benefit, as defined in section 19, arises in respect of a debt that is owed by a person and that debt was used directly or indirectly to fund any amount of capital expenditure incurred, the debt benefit in respect of that debt must be applied to reduce any amount of capital expenditure incurred in the year of assessment that the debt benefit arises: Provided that any amount of the debt benefit that exceeds the capital expenditure incurred in the year of assessment that the debt benefit arises, must be treated as an amount received by or accrued to that person carrying on mining operations during that year of assessment in respect of a disposal of assets the cost of which has been included in capital expenditure incurred in respect of the mine to which that capital expenditure relates.

[Subsection (7EA) inserted by section 48 of Act 17 of 2017 effective on 1 January 2018, applies in respect of years of assessment commencing on or after that date]

(7F)  The aggregate of the amounts of capital expenditure determined under subsection (7C) in respect of any year of assessment in relation to any one mine shall, unless the Minister, after consultation with the Cabinet member responsible for mineral resources and having regard to any relevant fiscal, financial or technical implications, otherwise directs, not exceed the taxable income (as determined before the deduction of any amount allowable under section 15(a), but after the set-off of any balance of assessed loss incurred by the taxpayer in relation to that mine in any previous year which has been carried forward from the preceding year of assessment) derived by the taxpayer from mining on that mine, and any amount by which the said aggregate would, but for the provisions of this subsection, have exceeded such taxable income as so determined, shall be carried forward and be deemed to be an amount of capital expenditure incurred during the next succeeding year of assessment in respect of that mine: Provided that where the taxpayer was on 5 December 1984 carrying on mining operations on two or more mines, the said mines shall for the purposes of this subsection be deemed to be one mine.

(7G)

(a)     Where in the case of any mine in respect of which mining operations or any related operations were or are commenced by the taxpayer after 14 March 1990 (in this subsection referred to as a new mine) an amount of capital expenditure falls to be disallowed under the provisions of subsection (7F), there shall, notwithstanding the provisions of that subsection, be deducted from the total taxable income derived by the taxpayer from mining (as determined after the deduction of any capital expenditure which does not fall to be disallowed under the said provisions and after the set–off of any assessed loss incurred by him from mining operations in a previous year of assessment which has been carried forward) so much of the total amount of capital expenditure which has been so disallowed in relation to all producing new mines owned by the taxpayer as does not exceed 25 per cent of such taxable income.

(b)     The provisions of paragraph (a) shall not apply to capital expenditure incurred in respect of any new mine –

(i)      which has been disposed of by the taxpayer in the current or any previous year of assessment; or

(ii)     if the taxpayer is a company and its acquisition of the right to mine or the mineral rights in respect of such mine was financed wholly or partly by the issue of any share in respect of which any dividend or foreign divident is to be calculated by reference to that portion of the company’s profits which is attributable to the operation of such mine.

(8)     ……….

(9)     ……….

(10)   Where separate and distinct mining operations are carried on in mines that are not contiguous, the allowance for redemption of capital expenditure shall be computed separately.

Subsection 12 of section 36 of ITA

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(12)   The balance of capital expenditure unredeemed at the commencement of the first year of assessment chargeable under this Act shall be the balance shown to be unredeemed at the end of the last year of assessment chargeable under the Income Tax Act, 1941.

Section 37L (ITA) – Withholding of withholding tax on interest by payers of interest

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37L.    ……….

[Section 37L inserted by section 58 of Act 7 of 2010, amended by section 64 of Act 24 of 2011, repealed by section 68 of Act 22 of 2012 effective on 31 December 2012, inserted by section 11 of Act 21 of 2012 effecttive on 1 July 2013 – insertion by section 11 of Act 21 of 2012 repealed by section 66 of Act 44 of 2014 effective on 30 June 2013 – section 37L substituted with previous version as it was prior to the amendment by section 11 of Act 21 of 2012]

Section 37M (ITA) – Payment and recovery of tax

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37M.   ……….

[Section 37M inserted by section 58 of Act 7 of 2010, substituted by section 65 of Act 24 of 2011, repealed by section 68 of Act 22 of 2012 effective on 31 December 2012, inserted by section 11 of Act 21 of 2012 effective on 1 July 2013 – insertion by section 11 of Act 21 of 2012 repealed by section 66 of Act 44 of 2014 effective on 30 June 2013 – section 37M substituted with previous version as it was prior to the amendment by section 11 of Act 21 of 2012]

“Allowance asset” definition of section 41 of ITA

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(1)     For the purposes of this Part, unless the context otherwise indicates, any word or expression that has been defined in section 1, shall bear the same meaning so defined, and-

 

‘allowance asset’ means-

 

(a)     a capital asset in respect of which a deduction or allowance is allowable in terms of this Act for purposes other than the determination of any capital gain or capital loss; or

 

(b)     any debt contemplated in section 11 (i) or (j);