Category: PART I – Normal Tax (ITA)

Section 10(1)(gC) of ITA

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(gC)   any-

(i)      amount received by or accrued to any resident under the social security system of any other country; or

(ii)     lump sum, pension or annuity received by or accrued to any resident from a source outside the Republic as consideration for past employment outside the Republic other than from any pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund as defined in section 1(1) or a company that is a resident and that is registered in terms of the Long-term Insurance Act as a person carrying on long-term insurance business excluding any amount transferred to that fund or that insurer from a source outside the Republic in respect of that member;

[Subpara (ii) substituted by section 9 of Act 19 of 2001, section 19 of Act 22 of 2012, section 14 of Act 43 of 2014, section 23 of Act 15 of 2016 and 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]

Section 9I (ITA) – Headquarter companies

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9I.     Headquarter companies

 

(1)     Any company that-

 

(a)     is a resident; and

 

(b)     complies with the requirements prescribed by subsection (2),

 

may elect in the form and manner determined by the Commissioner to be a headquarter company for a year of assessment of that company.

 

(2)     A company complies with the requirements contemplated in subsection (1)(b) for a year of assessment of that company if-

 

(a)     for the duration of that year of assessment, each holder of shares in the company (whether alone or together with any other company forming part of the same group of companies as that holder) held 10 per cent or more of the equity shares and voting rights in that company: Provided that in determining whether a company complies with the requirements prescribed by this paragraph in relation to any year of assessment of that company during which the company commenced the carrying on of trade, no regard must be had to any period during that year before which the company so commenced the carrying on of trade;

 

(b)     at the end of that year of assessment and of all previous years of assessment of that company, 80 per cent or more of the cost of the total assets of the company was attributable to one or more of the following:

 

(i)      any interest in equity shares in;

 

(ii)     any debt owed by; or

 

(iii)    sany intellectual property as defined in section 23I(1) that is licensed by that company to,

 

any foreign company in which that company (whether alone or together with any other company forming part of the same group of companies as that company) held at least 10 per cent of the equity shares and voting rights: Provided that in determining-

 

(aa)   the total assets of the company, there must not be taken into account any amount in cash or in the form of a bank deposit payable on demand; and

 

(bb)   whether a company complies with the requirements prescribed by this paragraph in relation to any year of assessment of that company, no regard must be had to any such year of assessment if the company did not at any time during such year of assessment own assets with a total market value exceeding R50 000; and

 

(c)     where the gross income of that company for that year of assessment exceeds R5 million, 50 per cent or more of that gross income consisted of amounts in the form of one or both of the following:

 

(i)      any rental, dividend, interest, royalty or service fee paid or payable by any foreign company contemplated in paragraph (b); or

 

(ii)     any proceeds from the disposal of any interest contemplated in paragraph (b)(i) or of any intellectual property contemplated in paragraph (b)(iii): 

Provided that in determining the gross income of the company, there must not be taken into account any exchange difference determined in terms of section 24I in respect of any exchange item as defined in that section to which that company is a party.

 

(3)     An election made by a company in terms of subsection (1) is effective from the commencement of the year of assessment in respect of which that election is made.

 

(4)     A headquarter company must submit to the Minister an annual report providing the Minister with the information that the Minister may prescribe within such time and containing such information as the Minister may prescribe.

Section 10(1)(gB) of ITA

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(gB)   any –

(i)      compensation paid in terms of the Workmen’s Compensation Act, 1941 (Act No. 30 of 1941), or the Compensation for Occupational Injuries and Diseases Act, 1993 (Act No. 130 of 1993);

(ii)     pension paid in respect of the death or disablement caused by any occupational injury or disease sustained or contracted by an employee before 1 March 1994 in the course of employment, where that employee would have qualified for compensation under the Compensation for Occupational Injuries and Diseases Act. 1993, had that injury or disease been sustained or contracted on or after 1 March 1994; or

(iii)    compensation paid in respect of the death of any person where that death arises out of and in the course of the employment of that person, to the extent that that compensation-

(A)    was paid in addition to any compensation contemplated in subparagraph (i) paid in that respect;

(B)    does not exceed an amount of R300 000; and

(C)    was paid by the employer of that person;

(iv)    compensation paid in terms of section 17 of the Road Accident Fund Act, 1996 (Act No. 56 of 1996);

“Qualifying share” definition of section 9C of ITA

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“qualifying share”……….

[Definition of “qualifying share” substituted by section 7 of Act 3 of 2008, amended by section 11 of Act 43 of 2014 and deleted by section 12 of Act 25 of 2015 effective on 1 January 2016]