Category: Definitions – ITA

“Accommodating or tax-indifferent party” definition of section 80E of ITA

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(1)     A party to an avoidance arrangement is an accommodating or tax-indifferent party if –

 

(a)     any amount derived by the party in connection with the avoidance arrangement is either –

 

(i)      not subject to normal tax; or

 

(ii)     significantly offset either by any expenditure or loss incurred by the party in connection with that avoidance arrangement or any assessed loss of that party; and

 

(b)     either –

 

(i)      as a direct or indirect result of the participation of that party an amount that would have –

 

(aa)   been included in the gross income (including the recoupment of any amount) or receipts or accruals of a capital nature of another party would be included in the gross income or receipts or accruals of a capital nature of that party; or

 

(bb)   constituted a non-deductible expenditure or loss in the hands of another party would be treated as a deductible expenditure by that other party; or

 

(cc)    constituted revenue in the hands of another party would be treated as capital by that other party; or

 

(dd)   given rise to taxable income to another party would either not be included in gross income or be exempt from normal tax; or

 

(ii)     the participation of that party directly or indirectly involves a prepayment by any other party,

“Accrual amount” definition of section 24J of ITA

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(1)     For the purposes of this section, unless the context otherwise indicates –

 

“accrual amount”, in relation to an accrual period, means an amount determined in accordance with the following formula:

 

A = B x C

 

in which formula –

 

(a)     “A” represents the amount to be determined;

 

(b)     “B” represents the yield to maturity; and

 

(c)     “C” represents the adjusted initial amount:

 

Provided that –

 

(i)      where the commencement or end of any year of assessment falls within an accrual period, the amount so determined shall be apportioned on a day to day basis over the term of such accrual period in order to determine the relevant portion of such amount relating to that part of such accrual period falling within the year of assessment so commencing or ending, as the case may be;

 

(ii)     where an instrument is transferred on a date other than at the end of an accrual period, the amount so determined shall be apportioned on a day to day basis over the term of such accrual period in order to determine the relevant portion of such amount relating to the relevant transferor or transferee, as the case may be, in relation to such instrument; and

 

(iii)    the amount so determined shall be appropriately adjusted by taking into account amounts received or payments made other than at the end of an accrual period;

“Accrual period” definition of section 24J of ITA

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“accrual period”, in relation to an instrument, means –

 

(a)     where in terms of such instrument regular payments at intervals of equal length and not exceeding 12 months per interval are to be made throughout the term of such instrument, the period between such regular payments; or

 

(b)     any period not exceeding 12 months elected by the holder or issuer, as the case may be,

 

which period shall be applied consistently throughout the term of such instrument;

“Acquired company” definition of section 23N of ITA

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(1)       For the purposes of this section-

‘acquired company’ means-

(a)     a transferor company or a liquidating company that disposes of assets pursuant to a reorganisation transaction; or

(b)     a company in which equity shares are acquired by another company in terms of an acquisition transaction;

“Acquiring company” definition of section 23K of ITA

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(1)       For the purposes of this section-

 

“acquiring company” means-

 

(a)     a transferee company contemplated in the definition of “intra-group transaction” in section 45(1);

 

(b)     a holding company contemplated in the definition of “liquidation distribution” in section 47(1); or

 

(c)     a company that acquires an equity share in another company in terms of an acquisition transaction;

“Acquiring company” definition of section 23N of ITA

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‘acquiring company’ means-

(a)     a transferee company contemplated in the definition of ‘intra-group transaction’ in section 45(1);

(b)     a holding company contemplated in the definition of ‘liquidation distribution’ in section 47(1); or

(c)     a company that acquires an equity share in another company in terms of an acquisition transaction;

“Acquisition rate” definition of section 24I of ITA

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(1)     For the purposes of this section –

 

“acquisition rate” means the exchange rate in respect of an exchange item obtained by dividing the amount of the expenditure incurred for the acquisition of such exchange item by the foreign currency amount in respect of such exchange item;

“Acquisition transaction” definition of section 23N of ITA

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‘acquisition transaction’ means any transaction-

(a)     in terms of which an acquiring company acquires an equity share in an acquired company that is a company as contemplated in paragraph (a) or (b) of the definition of “acquisition transaction” in section 24O(1); and

[Paragraph (a) substituted by section 40 of Act 25 of 2015 effective on 1 January 2016]

(b)     as a result of which that acquiring company, as at the end of the day of that transaction, becomes a controlling group company in relation to that acquired company;

[Paragraph (b) substituted by section 40 of Act 25 of 2015 effective on 1 January 2016]

“Acquisition transaction” definition of sectoin 24O of ITA

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(1)       For the purposes of this section-

“acquisition transaction” means any transaction in terms of which a company acquires an equity share in another company from a person that does not form part of the same group of companies as that company, if-

(a)     that other company is-

(i)  an operating company on the date of acquisition of that share; and

(ii) as a result of which, at the end of the day of that transaction-

(aa)   that company is a controlling group company in relation to that other company; and

(bb)   that company and that other company form part of the same group of companies as defined in section 41(1); or

(b)      that other company is-

(i)  a controlling group company in relation to a company that is an operating company on the date of acquisition of that share and that forms part of the same group of companies, as defined in section 41(1), as that controlling group company; and

(ii) as a result of which, at the end of the day of that transaction-

(aa)   that company is a controlling group company in relation to that other controlling group company; and

(bb)   that company and that other controlling group company form part of the same group of companies as defined in section 41(1);

[Definition of “acquisition transaction” substituted by section 31(1)(a) of Act 34 of 2019 deemed effective on 1 January, 2019 and applicable in respect of years of assessment ending on or after that date]