‘bank’ means any-
(a) any bank or branch as defined in section 1 of the Banks Act respectively;
[Paragraph (a) substituted by section 64 of Act 43 of 2014 effective on 1 March 2015 – comes into operation in terms of section 64 of Act 43 of 2014 as substituted by section 153 of Act 25 of 2015]
(b) mutual bank as defined in section 1 of the Mutual Banks Act, 1993 (Act No. 124 of 1993); or
(c) co-operative bank as defined in section 1 of the Co-operative Banks Act, 2007 (Act No. 40 of 2007);
50A. Definitions
In this Part-
PART IVB
Withholding tax on interest
49H. Currency of payments made to Commissioner
If an amount withheld by a person in terms of section 49E(1) is denominated in any currency other than the currency of the Republic, the amount so withheld must, for the purposes of determining the amount to be paid to the Commissioner in terms of section 49F(2), be translated to the currency of the Republic at the spot rate on the date on which the amount was so withheld.
[Section 49H inserted by section 63 of Act 43 of 2014 effective on 1 July 2013]
40E. Ceasing to be controlled foreign company
Where a controlled foreign company ceases to be a controlled foreign company during any foreign tax year of that controlled foreign company prior to 5 June 2015 solely by reason of the coming into operation of the Taxation Laws Amendment Act, 2015, section 9H(3)(b) must not apply.
[Section 40E inserted by section 60 of Act 25 of 2015 effective on 31 December 2015]
37D. Allowance in respect of land conservation in respect of nature reserves or national parks
(1) For the purposes of this section, ‘declared land’ means-
(a) land owned by a person and that is declared a national park or nature reserve in terms of an agreement entered into with that person under section 20 or 23 of the National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003); and
(b) land in respect of which an endorsement is effected to the title deed of that land that reflects the declaration contemplated in paragraph (a) and has a duration of at least 99 years.
[Paragraph (b) substituted by section 53 of Act 23 of 2018 effective on 17 January 2019]
(2) There must be allowed to be deducted from the income of any person in respect of declared land, in the year of assessment during which that land becomes declared land and in each subsequent year of assessment, an amount equal to four per cent of-
(a) the expenditure incurred in respect of-
(i) the acquisition of the declared land; and
(ii) improvements effected to the declared land (other than borrowing or finance costs),
if that expenditure is not less than the lower of market value or municipal value of that declared land; or
[Words following paragraph (a) substituted by section 53 of Act 23 of 2018 effective on 17 January 2019]
(b) an amount determined in accordance with the formula:
A = B + (C x D)
in which formula-
(i) ‘A’ represents the amount to be determined;
(ii) ‘B’ represents the cost of acquisition of the declared land and of any improvements to that land;
(iii) ‘C’ represents the amount of a capital gain (if any), that would have been determined in terms of the Eighth Schedule had the declared land been disposed of for an amount equal to the lower of the market value or municipal value of that land on the date of the agreement; and
(iv) ‘D’ represents 60 per cent in the case of a natural person or special trust or 20 per cent in any other case,
[Subparagraph (iv) substituted by section 53 of Act 15 of 2016 effective on 1 March 2016, applies in respect of years of assessment commencing on or after that date]
if the lower of market value of the declared land or municipal value of that declared land exceeds the expenditure contemplated in paragraph (a).
[Words following paragraph (b) substituted by section 53 of Act 23 of 2018 effective on 17 January 2019]
[Paragraphs following the formula substituted by section 53 of Act 15 of 2016 effective on 1 March 2015, applies in respect of years of assessment commencing on or after that date]
(3) If a person retains a right of use of the declared land, the deduction to be allowed in terms of this section must be limited to an amount that bears to the amount determined as contemplated in subsection (2) the same ratio as the market value of the declared land subject to the right of use bears to the market value of the declared land had that declared land not been subject to that right of use.
[Subsection (3) substituted by section 53 of Act 23 of 2018 effective on 17 January 2019]
(4) The deductions which may be allowed in terms of this section in respect of declared land must not in aggregate exceed the expenditure incurred as referred to in subsection (2)(a) or the amount referred to in symbol ‘A’ under subsection (2)(b), as the case may be.
(5) If the agreement in respect of which the land that becomes declared land is terminated by the person with which the agreement is entered into, an amount equal to the aggregate of the deductions allowed in terms of this section in the five years of assessment preceding the termination must be included in the income of that person in the year of assessment that the agreement is terminated.
[Section 37D inserted by section 27 of Act 101 of 1990, repealed by section 50 of Act 35 of 2007, re-inserted by section 53 of Act 43 of 2014 effective on 1 March 2015]
30C. Small business funding entities
(1) The Commissioner must approve a small business funding entity for the purposes of section 10(1)(cQ) if-
(a) that entity is a trust, an association of persons or a non-profit company as defined in section 1 of the Companies Act that has been incorporated, formed or established in the Republic;
[Paragraph (a) substituted by section 55 of Act 25 of 2015 effective on 1 March 2015]
(b)
(i) the sole or principal object of that entity is the provision of funding for small, medium and micro-sized enterprises; and
(ii) the funding contemplated in subparagraph (i) is-
(aa) provided by that small business funding entity for the benefit of, or is widely accessible to small, medium and micro-sized enterprises;
(bb) provided on a non-profit basis and with an altruistic or philanthropic intent; and
(cc) not intended to directly or indirectly promote the economic self-interest of any fiduciary or employee of that entity, otherwise than by way of reasonable remuneration payable to that fiduciary or employee;
(c) that small business funding entity has submitted to the Commissioner a copy of the constitution or written instrument under which that small business funding entity has been established;
(d) the constitution or written instrument contemplated in paragraph (c) provides that-
(i)
(aa) the small business funding entity must have a committee, a board of management or similar governing body consisting of at least three natural persons who are not connected persons in relation to each other to accept the fiduciary responsibility of that small business funding entity;
(bb) not more than fifty per cent of the members of the committee or a board of management contemplated in item (aa) may be employees or directors of any entity providing funding to that small business funding entity or persons who are connected persons in relation to any such employee or director;
(ii) any single person may not directly or indirectly control the decision-making powers relating to that small business funding entity;
(iii) the small business funding entity may not directly or indirectly distribute any of its funds or assets to any person other than in the course of furthering its sole or principal object;
(iv) the small business funding entity may not directly or indirectly distribute any of its funds or assets to any employee in relation to that entity or a person that is a connected person in relation to any such employee or to a person contemplated in subparagraph (i);
(v) the small business funding entity is required to utilise substantially the whole of its funds for its sole or principal object for which it has been established;
(vi) the small business funding entity must within 12 months after the end of the relevant year of assessment distribute or incur the obligation to distribute at least 25 per cent of all amounts received or accrued in respect of assets held, other than any amount received or accrued in respect of the disposal of any of those assets, during that year of assessment;
[Subparagraph (vi) substituted by section 52 of Act 23 of 2018 effective on 1 January 2019]
(vii) a member of a committee, a board of management or similar governing body of the small business funding entity may not directly or indirectly have any personal or private interest in that small business funding entity;
(viii) substantially the whole of the activities of the small business funding entity must be directed to the furtherance of the sole or principal object of that small business funding entity;
(ix) the small business funding entity may not pay to any employee, office bearer, member or other person any remuneration, as defined in the Fourth Schedule, which is excessive, having regard to what is generally considered reasonable in the sector and in relation to the service rendered;
(x) the small business funding entity must as part of its dissolution transfer its assets to-
(aa) another small business funding entity approved by the Commissioner in terms of this section;
(bb) a public benefit organisation contemplated in paragraph (a)(i) of the definition of public benefit organisation in section 30(1) that is approved by the Commissioner as a public benefit organisation in terms of that section;
(cc) an institution, board or body which is exempt from tax under section 10(1)(cA)(i); or
(dd) the government of the Republic in the national, provincial or local sphere;
(xi) the persons contemplated in paragraph (d)(i) will submit any amendment of the constitution or written instrument of the small business funding entity to the Commissioner within 30 days of its amendment;
(xii) the small business funding entity will comply with such reporting requirements as may be determined by the Commissioner from time to time; and
(xiii) the small business funding entity is not knowingly and will not knowingly become a party to, and does not knowingly and will not knowingly permit itself to be used as part of, an impermissible avoidance arrangement contemplated in Part IIA of Chapter III, or a transaction, operation or scheme contemplated in section 103(5).
(xiii) the small business funding entity is not knowingly and will not knowingly become a party to, and does not knowingly and will not knowingly permit itself to be used as part of, an impermissible avoidance arrangement contemplated in Part IIA of Chapter III, or a transaction, operation or scheme contemplated in section 103(5); and
[Subparagraph (xiii) amended by section 9(a) of Act 18 of 2023]
(e) the Commissioner is satisfied that the entity does not have a person acting in a fiduciary capacity, who is disqualified in terms of section 6 of the Trust Property Control Act, 1988 (Act 57 of 1988), section 25A of the Nonprofit Organisations Act, 1997 (Act 71 of 1997), or section 69 of the Companies Act.
[Paragraph (e) inserted by section 9(b) of Act 18 of 2023]
(2) Where the Commissioner is-
(a) satisfied that any small business funding entity approved in terms of subsection (1) has during any year of assessment in any material respect; or
(b) during any year of assessment satisfied that any small business funding entity approved in terms of subsection (1) has on a continuous or repetitive basis,
failed to comply with this section, or the constitution or written instrument under which that small business funding entity was established to the extent that it relates to this section, the Commissioner must notify the small business funding entity that the Commissioner intends to withdraw approval of the small business funding entity if corrective steps are not taken by the small business funding entity within the period stated in the notice.
(3) If no corrective steps are taken by the small business funding entity as contemplated in subsection (2), the Commissioner must withdraw approval of that small business funding entity with effect from the commencement of the year of assessment contemplated in subsection (2).
(4) If the Commissioner has withdrawn the approval of a small business funding entity as contemplated in subsection (3) the small business funding entity must within six months after the date of the withdrawal of approval (or such longer period as the Commissioner may allow) transfer, or take reasonable steps to transfer, its remaining assets to any small business funding entity, public benefit organisation, institution, board or body or the government of the Republic, as contemplated in subsection (1)(d)(x).
(5) If a small business funding entity is wound up or liquidated, the small business funding entity must, as part of the winding-up or liquidation, transfer its assets remaining after the satisfaction of its liabilities to any small business funding entity, public benefit organisation, institution, board or body or the government of the Republic, as contemplated in subsection (1)(d)(x).
(6) If a small business funding entity fails to transfer, or to take reasonable steps to transfer, its assets as contemplated in subsection (4) or (5), an amount equal to the market value of those assets which have not been transferred less an amount equal to the bona fide liabilities of that small business funding entity must for the purposes of this Act be deemed to be an amount of taxable income which accrued to that small business funding entity during the year of assessment in which the withdrawal of approval in terms of subsection (4) or the winding-up or liquidation contemplated in subsection (5) took place.
(7) Any person who is in a fiduciary capacity responsible for the management of any small business funding entity and who intentionally fails to comply with any provision of this section or of the constitution, or other written instrument under which that small business funding entity is established to the extent that it relates to the provisions of this section, shall be guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding 24 months.
[Section 30C inserted by section 49 of Act 43 of 2014 effective on 1 March 2015]
(8) A person may not act in a fiduciary capacity if that person is disqualified in terms of section 6 of the Trust Property Control Act, 1988 (Act 57 of 1988), section 25A of the Nonprofit Organisations Act, 1997 (Act 71 of 1997), or section 69 of the Companies Act.
[Subsection (8) inserted by section 9(c) of Act 18 of 2023]
(9) A person who fails to comply with the provisions of subsection (8) shall be guilty of an offence and liable, upon conviction, to a fine or to imprisonment for a period not exceeding 24 months.
[Subsection (9) inserted by section 9(c) of Act 18 of 2023]
“risk policy fund” means the fund contemplated in subsection 4(e);
[Definition of ‘risk policy fund’ inserted by section 47 of Act 43 of 2014 effective on 1 January 2016]
“risk policy” means-
(a) any policy issued by the insurer during any year of assessment of that insurer commencing on or after 1 January 2016 under which the benefits payable-
(i) cannot exceed the amount of premiums receivable, except where all or substantially the whole of the policy benefits are payable due to death, disablement, illness or unemployment and excludes a contract of insurance in terms of which annuities are being paid; or
(ii) other than benefits payable due to death, disablement, illness or unemployment, cannot exceed the amount of premiums receivable and excludes a contract of insurance in terms of which annuities are being paid; or
[Paragraph (a) substituted by section 50 of Act 15 of 2016 effective on 1 January 2016, applies in respect of years of assessment commencing on or after that date]
(b) any policy in respect of which an election has been made as contemplated in subsection (13B);
[Definition of “risk policy” inserted by section 47 of Act 43 of 2014 effective on 1 January 2016, substituted by section 53 of Act 25 of 2015 effective on 1 January 2016]
“adjusted IFRS value”, in respect of a policyholder fund or the risk policy fund, means an amount, which may not be less than zero, and which must be calculated in accordance with the formula-
I = (L + LIC + DL + PF) – PT– DC + DR
in which formula-
(a) “I” represents the amount to be determined;
(b) “L” represents, in respect of policies of the insurer, the aggregate amounts of-
(i) insurance contract liabilities;
(ii) investment contract liabilities; and
(iii) reinsurance contract liabilities,
reduced by-
(aa) insurance contract assets;
(bb) reinsurance contract assets, and
(cc) liability for incurred claims contemplated in paragraph (c),
the amounts of which are determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited annual financial statements: Provided that any amount that is payable to or receivable from a cell owner, referred to in the definition of ‘cell structure’ in section 1 of the Insurance Act, in respect of “third party risks” as defined in that section of that Act, must be disregarded: Provided further that the amount may not be less than zero;
[Paragraph (b) amended by section 32(1)(a) of Act 17 of 2023 effective on 1 January, 2023 and applicable in respect of years of assessment commencing on or after that date]
(c) “LIC” represents the amount of the liability for incurred claims determined in accordance with IFRS 17 in respect of the policies of the insurer, net of amounts recognised in reinsurance contracts for liabilities for incurred claims, which are determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited annual financial statements, in respect of policies allocated to that fund;
(d) “DL” represents for a policyholder fund the amount of deferred tax liabilities, determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited annual financial statements, in respect of assets allocated to that policyholder fund;
(e) “PF” represents the amount calculated in terms of subsection (14) if a phasing-in amount is determined in terms of subsection (15)(a);
(f) “PT” represents the amount calculated in terms of subsection (14) if a phasing-in amount is determined in terms of subsection (15)(b);
(g) “DC” represents for a policyholder fund the amount of deferred acquisition costs determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited financial statements; and
(h) “DR” represents for a policyholder fund the amount of deferred revenue determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited financial statements;
[Definition of “adjusted IFRS value” (insertion by section 47(1)(a) of Act 43 of 2014 deleted by section 101(1)(a) of Act 15 of 2016) inserted by section 50(1)(a) of Act 15 of 2016 and substituted by section 46(1)(a) of Act 17 of 2017 and by section 15(1)(a) of Act 20 of 2022 effective on 1 January, 2023 and applicable in respect of years of assessment commencing on or after that date]