Category: CHAPTER II – The Taxes (ITA)

Section 60 (ITA) – Payment and assessment of the tax

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60.    Payment and assessment of the tax

(1)     Donations tax shall be paid to the Commissioner by the end of the month following the month during which a donation takes effect or such longer period as the Commissioner may allow from the date upon which the donation in question takes effect.

(2)     Where a donor has during the year of assessment disposed of property under more than one donation in respect of which an exemption may be applicable under the provisions of section 56 (2) (a) or (b), the amount to be exempted in respect of any such donation shall be calculated according to the order in which such donations took effect.

(3)     Where a donor has disposed of property under more than one donation on the same date those donations shall for the purpose of determining the tax payable in respect of each donation be deemed to have taken effect –

(a)     in such order as the donor may elect; or

(b)     if the donor fails to make an election within fourteen days after having been called upon by the Commissioner to do so, in such order as the Commissioner may determine.

(4)     The payment of the tax in terms of subsection (1) shall be accompanied by a return.

(5)     The Commissioner may, in accordance with Chapter 8 of the Tax Administration Act, at any time assess either the donor or the donee or both the donor and the donee for the amount of donations tax payable or, where the Commissioner is satisfied that the tax payable under this Part has not been paid in full, for the difference between the amount of the tax payable and the amount paid, but the payment by either of those parties of the amount payable under such assessment shall discharge the joint obligation.

[Sub­section (5) substituted by section 5 of Act 33 of 2019]

Section 64EA (ITA) – Liability for tax

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64EA.   Liability for tax

Any-

(a)     beneficial owner of a dividend, to the extent that the dividend does not consist of a distribution of an asset in specie; or

(b)     company that is a resident that declares and pays a dividend to the extent that the dividend consists of a distribution of an asset in specie,

is liable for the dividends tax in respect of that dividend.

[Section 64EA inserted by section 77(1) of Act 24 of 2011 and amended by section 84(1) of Act 22 of 2012 and by section 44 of Act 34 of 2019]

Section 49F – Payment and recovery of tax

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49F.     Payment and recovery of tax

(1)     If, in terms of section 49C, a foreign person is liable for any amount of withholding tax on royalties in respect of any amount of royalties that is paid to or for the benefit of the foreign person, that foreign person must pay that amount of withholding tax and submit a return by the last day of the month following the month during which the royalty is paid, unless the tax has been paid by any other person.

[Subsection (1) substituted by section 62(1) of Act 43 of 2014 and by section 3 of Act 21 of 2021]

(2)     Any person that withholds any withholding tax on royalties in terms of section 49E must submit a return and pay the tax to the Commissioner by the last day of the month following the month during which the royalty is paid.

[Subsection (2) substituted by section 62 of Act 43 of 2014 effective on 1 January 2015]

Section 61 (ITA) – Extension of scope of certain provisions of Act for purposes of donations tax

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61.    Extension of scope of certain provisions of Act for purposes of donations tax

 

For the purposes of the donations tax –

 

(a)     any reference in paragraph (a) or (e) of the definition of ‘representative taxpayer’ in section 1 to the income of any person or to the gross income received by or accrued to or in favour of any person shall be deemed to include a reference to property disposed of by any person under a donation or to the value of such property, as the context may require;

 

(b)     ……….

 

(c)     ……….

 

(d)     the reference in paragraphs (b) and (c) of the definition of “representative taxpayer” in section 1 to the income under the management, disposition or control of an agent or to income which is the subject of any trust, as the case may be, shall be deemed to include a reference to any property disposed of under a donation which is under the management, disposition or control of the agent or to property disposed of under a donation which is the subject of the trust, as the case may be;

 

(e)     ……….

 

(f)      ……….

 

(g)     ……….

[Paragraph (g) added by section 25 of Act 90 of 1962, substituted by section 29 of Act 90 of 1988 and deleted by section 3 of Act 23 of 2015 effective on 8 January 2016]

Section 64EB (ITA) – Deemed beneficial owners of dividends

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64EB.    Deemed beneficial owners of dividends

(1)       For the purposes of this Part, where-

(a)     a person contemplated in section 64F(1) acquires the right to a dividend in respect of a share, including a dividend that has not yet been declared or has not yet accrued, by way of cession; and

(b)     an amount in respect of that dividend is received by or accrues to the person who acquired that right,

any person ceding that right is deemed to be the beneficial owner of that dividend: Provided that this subsection does not apply to any cession in respect of a share if the person to whom those rights are ceded holds all the rights attaching to the share after the cession.

[Subsection (1) amended by section 61(1)(a) of Act 23 of 2018 and by section 37(1)(a) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement]

(2)       For the purposes of this Part, where-

(a)     a person that is –

(i)      a company which is a resident;

(ii)     the government of the Republic in the national, provincial or local sphere;

[Subparagraph (ii) substituted by section 69 of Act 43 of 2014 effective on 4 July 2013]

(iii)    a public benefit organisation approved by the Commissioner in terms of section 30(3);

(iv)    a trust contemplated in section 37A;

(v)     an institution, board or body contemplated in section 10(1)(cA);

(vi)    a fund contemplated in section 10(1)(d)(i)or(ii);

(vii)   a person contemplated in section 10(1)(t);

(viii)  ……….

[Subparagraph (viii) deleted by section 74 of Act 25 of 2015 effective on 8 January 2016]

(ix)    ……….

[Subparagraph (ix) deleted by section 74 of Act 25 of 2015 effective on 8 January 2016]

(x)     a portfolio of a collective investment scheme in securities;

(xi)    any person to the extent that the dividend constitutes income of that person;

(xii)   ………..

[Subparagraph (xii) amended by section 69 of Act 43 of 2014 effective on 4 July 2013, deleted by section 74 of Act 25 of 2015 effective on 8 January 2016]

(xiii)  any fidelity or indemnity fund contemplated in section 10(1)(d)(iii), or

[Subparagraph (xiii) amended by section 69 of Act 43 of 2014 effective on 4 July 2013]

(xiv)   a small business funding entity as contemplated in section 10(1)(cQ).

[Subparagraph (xiv) added by section 69 of Act 43 of 2014 effective on 4 July 2013]

borrows from another person or acquires a listed share in terms of a collateral arrangement entered into with another person; and

[Paragraph (a) amended by section 61(1)(b) of Act 23 of 2018 and by section 37(1)(b) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement]

(b)     a dividend in respect of that share or any amount determined with reference to a dividend in respect of that share is received by or accrues to that person,

[Paragraph (b) substituted by section 61(1)(c) of Act 23 of 2018 and by section 37(1)(c) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement]

any amount paid by that person to that other person not exceeding that dividend or amount determined with reference to a dividend in respect of that share is deemed to be a dividend paid by that person for the benefit of that other person.

[Subsection (2) amended by section 69(1)(c) of Act 43 of 2014, by section 61(1)(d) of Act 23 of 2018 and by section 37(1)(d) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement]

(3)       For the purposes of this Part, where-

(a)     a person that is contemplated in section 64F(1) acquires a share in a listed company (or any right in respect of that share) from another person;

[Paragraph (a) substituted by section 61 of Act 23 of 2018 effective on 1 January 2019, applies in respect of years of assessment commencing on or after that date]

(b)     that acquisition is part of a resale agreement between the person acquiring that share and that other person or any other company forming part of the same group of companies as that other person; and

[Paragraph (b) amended by section 61 of Act 23 of 2018 effective on 1 January 2019, applies in respect of years of assessment commencing on or after that date]

(c)     a dividend in respect of that share is received by or accrues to that person,

[Paragraph (c) added by section 61 of Act 23 of 2018 effective on 1 January 2019, applies in respect of years of assessment commencing on or after that date]

that other person or other company is deemed to be the beneficial owner of that dividend.

(4)     For the purposes of this section, ‘resale agreement’ means the acquisition of a share by any person subject to an agreement in terms of which that person undertakes to dispose of that share or any other share of the same kind and of the same or equivalent quality at a future date.

Section 64FA (ITA) – Exemption from and reduction of tax in respect of dividends in specie

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64FA.  Exemption from and reduction of tax in respect of dividends in specie

(1)     Where a company declares and pays a dividend that consists of a distribution of an asset in specie, that dividend is exempt from the dividends tax to the extent that it constitutes a distribution of an asset in specie if-

(a)     the person to whom the payment is made has, before the dividend is paid, submitted to the company-

(i)      a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been exempt from the dividends tax in terms of section 64F or an agreement for the avoidance of double taxation; and

[Subparagraph (i) substituted by section 17 of Act 20 of 2022]

(ii)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the exemption applicable to the beneficial owner referred to in subparagraph (i) change or the beneficial owner cease to be a beneficial owner;

[Paragraph (a) amended by section 87(1)(a) of Act 22 of 2012 and by section 6(1)(a) of Act 33 of 2019]

(b)     the beneficial owner forms part of the same group of companies, as defined in section 41, as that company;

(c)     the dividend constitutes a disposal as contemplated in paragraph 51A of the Eighth Schedule; or

(d)     the dividend constitutes a disposal as contemplated in paragraph 67B(2) of the Eighth Schedule.

(2)     A company that declares and pays a dividend that consists of a distribution of an asset in specie is liable for the dividends tax at a reduced rate in respect of the portion of the dividend that constitutes the distribution of an asset in specie if the person to whom the payment is made has, before the dividend is paid, submitted to the company—

(a)     a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and

(b)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the reduced rate applicable to the beneficial owner referred to in paragraph (a) change or the beneficial owner cease to be the beneficial owner.

[Sub­section (2) amended by section 6(1)(b) of Act 33 of 2019. Paragraph (b) substituted by section 87(1)(e) of Act 22 of 2012 deemed effective on 1 April, 2012]

(3)     A declaration and written undertaking submitted in terms of subsection (1)(a) or (2) are no longer valid after a period of five years from the date of the declaration, unless the company that is making the payment is subject to the provisions of-

(a)     the Financial Intelligence Centre Act, 2001 (Act 38 of 2001);

(b)     the Agreement Between the Government of the Republic of South Africa and the Government of the United States of America to improve International Tax Compliance and to Implement the US Foreign Account Tax Compliance Act; or

(c)     the regulations for purposes of paragraph (a) of the definition of “international tax standard” in section 1 of the Tax Administration Act,

with regard to the person to whom the payment is made and takes account of these provisions in monitoring the continued validity of the declaration.

[Subsection (3) added by section 6(1)(c) of Act 33 of 2019 effective on 1 July, 2020]

Section 64G (ITA) – Withholding of dividends tax by companies declaring and paying dividends

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64G.    Withholding of dividends tax by companies declaring and paying dividends

(1)     Subject to subsections (2) and (3), a company that declares and pays a dividend must withhold an amount of dividends tax from that payment calculated as contemplated in section 64E except to the extent that the dividend consists of a distribution of an asset in specie.

[Sub­section (1) substituted by section 80(1) of Act 24 of 2011, by section 88(1)(a) of Act 22 of 2012, by section 106(1) of Act 31 of 2013 and by section 45 of Act 34 of 2019]

(2)     A company must not withhold any dividends tax from the payment of a dividend contemplated in subsection (1) if-

(a)     the person to whom the payment is made has, before the dividend is paid, submitted to the company-

(i)      a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the dividend is exempt from the dividends tax in terms of section 64F or an agreement for the avoidance of double taxation; and

[Subparagraph (i) substituted by section 33(1) of Act 20 of 2021 effective on 1 January, 2022 and applicable in respect of dividends paid on or after that date]

(ii)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing, should the circumstances affecting the exemption applicable to the beneficial owner referred to in subparagraph (i) change or the beneficial owner cease to be the beneficial owner;

[Paragraph (a) amended by section 88(1)(b) of Act 22 of 2012 and substituted by section 7(1)(a) of Act 33 of 2019]

(b)     the beneficial owner forms part of the same group of companies, as defined in section 41, as the company that paid the dividend; or

(c)     the payment is made to a regulated intermediary.

(3)     A company must withhold dividends tax from the payment of a dividend contemplated in subsection (1) at a reduced rate if the person to whom the payment is made has, before the dividend is paid, submitted to the company-

(a)     a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the dividend is subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and

(b)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing, should the circumstances affecting the reduced rate in paragraph (a) change or should the beneficial owner cease to be the beneficial owner.

[Sub­section (3) substituted by section 73(1) of Act 7 of 2010, amended by section 88(1)(c) of Act 22 of 2012 and substituted by section 7(1)(b) of Act 33 of 2019]

(4)     A declaration and written undertaking submitted in terms of subsection (2)(a) or (3) are no longer valid after a period of five years from the date of the declaration, unless the company that is making the payment is subject to the provisions of-

(a)     the Financial Intelligence Centre Act, 2001 (Act 38 of 2001);

(b)     the Agreement Between the Government of the Republic of South Africa and the Government of the United States of America to improve International Tax Compliance and to Implement the US Foreign Account Tax Compliance Act; or

(c)      the regulations for purposes of paragraph (a) of the definition of “international tax standard” in section 1 of the Tax Administration Act,

with regard to the person to whom the payment is made and takes account of these provisions in monitoring the continued validity of the declaration.

[Subsection (4) added by section 7(1)(c) of Act 33 of 2019 effective on 1 July, 2020]

Section 64H (ITA) – Withholding of dividends tax by regulated intermediaries

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64H.     Withholding of dividends tax by regulated intermediaries

 

(1)     Subject to subsections (2) and (3), a regulated intermediary that pays a dividend that was declared by any other person must withhold an amount of dividends tax from that payment calculated as contemplated in section 64E except to the extent that the dividend consists of a distribution of an asset in specie.

[Sub­section (1) substituted by section 81(1) of Act 24 of 2011, by section 89(1)(a) of Act 22 of 2012, by section 107(1) of Act 31 of 2013 and by section 46 of Act 34 of 2019]

 

(2)   A regulated intermediary must not withhold any dividends tax from the payment of a dividend contemplated in subsection (1) if-

 

(a)     the person to whom the payment is made has, before the dividend is paid, submitted to the regulated intermediary-

 

(i)      a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the dividend is exempt from the dividends tax in terms of section 64F or an agreement for the avoidance of double taxation, or that the payment is made to a vesting trust of which the sole beneficiary is another regulated intermediary; and

[Subparagraph (i) substituted by section 34(1) of Act 20 of 2021 effective on 1 January, 2022 and applicable in respect of dividends paid on or after that date]

 

(ii)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the regulated intermediary in writing, should the circumstances affecting the exemption applicable to the beneficial owner referred to in subparagraph (i) change or should the beneficial owner cease to be the beneficial owner;

[Paragraph (a) amended by section 89(1)(b) of Act 22 of 2012, substituted by section 8(1)(a) of Act 33 of 2019 and amended by section 8(1)(b) of Act 33 of 2019]

 

(b)     the payment is made to another regulated intermediary; or

[Paragraph (b) amended by section 8(1)(b) of Act 33 of 2019]

 

(c)     the dividend is exempt from dividends tax in terms of section 64F(1)(o).

[Paragraph (c) inserted by section 8(1)(c) of Act 33 of 2019]

 

(3)     A regulated intermediary must withhold dividends tax from the payment of a dividend contemplated in subsection (1) at a reduced rate if the person to whom the payment is made has, before the dividend is paid, submitted to the regulated intermediary—

 

(a)     a declaration by the beneficial owner in such form as may be prescribed by the Commissioner that the dividend is subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and

 

(b)     a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the regulated intermediary in writing should the circumstances affecting the reduced rate applicable to the beneficial owner referred to in paragraph (a) change or should the beneficial owner cease to be the beneficial owner.

[Subsection (3) substituted by section 74(1) of Act 7 of 2010, amended by section 89(1)(c) of Act 22 of 2012 and substituted by section 8(1)(d) of Act 33 of 2019]

 

(4)     A declaration and written undertaking submitted in terms of subsection (2)(a) or (3) are no longer valid after a period of five years from the date of the declaration, unless the regulated intermediary is subject to the provisions of-

 

(a)     the Financial Intelligence Centre Act, 2001 (Act 38 of 2001);

 

(b)     the Agreement Between the Government of the Republic of South Africa and the Government of the United States of America to improve International Tax Compliance and to Implement the US Foreign Account Tax Compliance Act; or

 

(c)     the regulations for purposes of paragraph (a) of the definition of “international tax standard” in section 1 of the Tax Administration Act,

 

with regard to the person to whom the payment is made and takes account of these provisions in monitoring the continued validity of the declaration.

[Subsection (4) added by section 8(1)(e) of Act 33 of 2019 effective on 1 July, 2020]

Section 64I (ITA) – Withholding of dividends tax by insurers

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64I.      Withholding of dividends tax by insurers

 

If a dividend, to the extent that the dividend does not consist of a distribution of an asset in specie, is paid to an insurer as defined in section 29A, the insurer must be deemed to be a regulated intermediary and the dividend must, to the extent that the dividend is allocated to a fund contemplated in section 29A(4)(b), be deemed to be paid to a natural person that is a resident by the regulated intermediary on the date that the dividend is paid to the insurer.