Category: Definitions – ITA

“Local currency” definition of section 24I of ITA

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“local currency” means in relation to-

(a)     any person in respect of an exchange item which is attributable to any permanent establishment outside the Republic, the functional currency of that permanent establishment: Provided that for purposes of this paragraph any exchange item shall be deemed not to be attributable to any such permanent establishment if the functional currency of that permanent establishment is the currency of a country which has an official rate of inflation of 100 per cent or more throughout the relevant year of assessment;

(b)     any resident, other than a headquarter company, a domestic treasury management company and an international shipping company as defined in section 12Q(1), in respect of an exchange item which is not attributable to a permanent establishment outside the Republic, the currency of the Republic;

[Paragraph (b) substituted by section 30 of Act 34 of 2019]

(c)     any person that is not a resident in respect of any exchange item which is attributable to a permanent establishment in the Republic, the currency of the Republic;

(d)     any headquarter company in respect of an exchange item which is not attributable to a permanent establishment outside the Republic, the functional currency of that headquarter company;

(e)     any domestic treasury management company in respect of an exchange item which is not attributable to a permanent establishment outside the Republic, the functional currency of that domestic treasury management company;

(f)      any international shipping company defined in section 12Q, in respect of an amount which is not attributable to a permanent establishment outside the Republic, the functional currency of that international shipping company;

“Low-cost residential unit” definition of section 1 of ITA

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“low-cost residential unit” means-

(a)     an apartment qualifying as a residential unit in a building located within the Republic, where-

(i)      the cost of the apartment does not exceed R350000; and

(ii)     the owner of the apartment does not charge a monthly rental in respect of that apartment that exceeds one per cent of the cost; or

(b)     a building qualifying as a residential unit located within the Republic, where-

(i)      the cost of the building does not exceed R300000; and

(ii)     the owner of the building does not charge a monthly rental in respect of that building that exceeds one per cent of the cost contemplated in subparagraph (i) plus a proportionate share of the cost of the land and the bulk infrastructure:

Provided that for the purposes of paragraphs (a)(ii) and (b)(ii), the cost is deemed to be increased by 10 per cent in each year succeeding the year in which the apartment or building is first brought into use;

“Lump sum benefit” definition of Second Schedule

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“lump sum benefit” includes-

(a)     any amount determined in respect of the commutation of an annuity or portion of an annuity-

(i)      payable by; or

(ii)     provided in consequence of membership or past membership of,

a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund; and

(b)     any fixed or ascertainable amount (other than an annuity) –

(i)      payable by; or

(ii)     provided in consequence of membership or past membership of,

a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund, whether in one amount or in instalments, but does not include any amount deemed to be income accrued to a person in terms of section 7(11);

“Manufacturing asset” definition of section 12I of ITA

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‘manufacturing asset’ means any building, plant or machinery acquired, contracted for or brought into use by a company, which –

 

(a)     will mainly be used by that company in the Republic for the purposes of carrying on an industrial project of that company within the Republic; and

 

(b)     will qualify for a deduction in terms of section 12C(1)(a), 13 or 13 quat;

 

and includes any improvement to such building, plant or machinery.

“Market value” definition of section 24I of ITA

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“market value”, in relation to a foreign currency option contract, means –

 

(a)     in the case of a person who for accounting purposes uses a market–related valuation method in terms of a practice consistently applied by him to determine the value of all his foreign currency option contracts, the market–related value so determined; or

 

(b)     in the case of any other person, the intrinsic value of such foreign currency option contract;

“Market value” definition of section 29A of ITA

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“market value”, in relation to any asset, means-

(a)     the amount which a person having the right freely to dispose of such asset might reasonably expect to obtain from a sale of such asset in the open market; or

(b)     where an asset cannot be sold in the open market, an amount equal to the value at which that asset is recognised in the audited annual financial statements of the insurer;

[Definition of “market value” substituted by section 30 of Act 23 of 2020]

“Market value” definition of section 29B of ITA

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‘market value’, in relation to any asset placed in any policyholder fund as contemplated in section 29A(4), means-

(a)     where that asset constitutes a financial instrument that is listed on-

(i)      an exchange as defined in section 1 of the Financial Markets Act and licensed under section 9 of that Act; or

(ii)     an exchange in a country other than the Republic which has been recognised by the Minister as contemplated in paragraph (c) of the definition of ‘recognised exchange’ in paragraph 1 of the Eighth Schedule,

the sum which a person having the right to freely dispose of that asset might reasonably expect to obtain from a sale of that asset in the open market; or

(b)     where that asset is an asset other than an asset contemplated in paragraph (a), the value of that asset as taken into account in determining the investment value of policies as reported to the owners of the policies in respect of the policyholder fund in which the asset is so placed; and