“Public Finance Management Act” means the Public Finance Management Act, 1999 (Act No. 1 of 1999);
Category: Definitions – ITA
“Public private partnership” definition of section 1 of ITA
“Public Private Partnership” means a Public Private Partnership as defined in-
(a) Regulation 16 of the Treasury Regulations issued in terms of section 76 of the Public Finance Management Act; or
(b) the Municipal Public-Private Partnership Regulations made in terms of section 168 of the Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003);
[Definition of “Public Private Partnership” inserted by section 3 of Act 32 of 2004 and substituted by section 4 of Act 31 of 2013 and section 1 of Act 43 of 2014 effective on 20 January 2015]
“Public sector fund” definition of Second Schedule
“public sector fund” means a fund referred to in paragraph (a), (b) or (d) of the definition of “pension fund” or paragraph (a), (b) or (c) of the definition of “provident fund” in section 1(1);
[Definition of “public sector fund” inserted by section 91(1)(e) of Act 22 of 2012 and substituted by section 62(1) of Act 15 of 2016 and by section 38(1) of Act 23 of 2020 effective on 1 March, 2021 and applicable in respect of years of assessment commencing on or after that date]
“Purchase price” definition of section 13quat of ITA
‘purchase price’ in relation to any building or part of a building purchased by the taxpayer means the lesser of –
(a) the actual cost to the taxpayer to purchase that building or part; or
(b) the cost which a person would have incurred had that person purchased that building or part under a cash transaction concluded at arm’s length on the date on which that taxpayer purchased that building or part;
“Purchaser” definition of section 10A of ITA
“purchaser”, in relation to an annuity contract means –
(a) any natural person and includes such person’s deceased or insolvent estate; or
(b) a curator bonis of, or a trust created solely for the benefit of, any natural person where the High Court has declared such person to be of unsound mind and incapable of managing his own affairs and such Court has ordered the appointment of such curator or creation of such trust, as the case may be;
“Qualifying company” definition of section 12J of ITA
‘qualifying company’ means any company if –
(a) that company is a resident;
(b) the company is not a controlled group company in relation to a group of companies of which a venture capital company to which that company has issued any share forms part from the date of issue of any such share and at any time during any year of assessment after that date;
[Paragraph (b) substituted by section 38(1)(c) of Act 24 of 2011, by section 29(1)(a) of Act 23 of 2018 and by section 17(1)(a) of Act 34 of 2019]
(c) the tax affairs of the company are in order and the company has complied with all the relevant provisions of the laws administered by the Commissioner;
(d) the company is an unlisted company as defined in section 41 or a junior mining company;
(e) the company is not carrying on any impermissible trade;
[Paragraph (e) substituted by section 25 of Act 17 of 2009 and amended by section 29 of Act 23 of 2018 effective on 1 January 2019 and applies in respect of participation rights acquired on or after that date]
(f) during any year of assessment of that company that ends after the expiry of a period of 36 months commencing on the first date on which that company issued any share to a venture capital company-
(i) the sum of the investment income, as defined in section 12E(4)(c), derived by that company does not exceed an amount equal to 20 per cent of the gross income of that company for that year; and
(ii) not more than 50 per cent of the aggregate amount received by or that accrued to that company from the carrying on of any trade was derived, directly or indirectly, from a person-
(aa) who holds a share in that venture capital company; or
(bb) who is a connected person in relation to a person referred to in item (aa);
[Paragraph (f) substituted by section 25 of Act 17 of 2009 and section 29 of Act 23 of 2018 effective on 24 October 2018]
(g) no person who holds a share in a venture capital company to which that company has issued any share holds, directly or indirectly and whether alone or together with any connected person in relation to that person, more than 50 per cent of the participation rights, as defined in section 9D(1), or of the voting rights in that company; and
[Paragraph (g) deleted by section 25 of Act 17 of 2009 and re-inserted by section 29 of Act 23 of 2018 effective on 1 January 2019 and applies in respect of participation rights acquired on or after that date]
(h) that company does not carry on any trade in relation to a venture, business or undertaking or part thereof that was acquired by that company, directly or indirectly, from a person-
(i) who holds a share in a venture capital company to which that company has issued any share; or
(ii) who is a connected person in relation to a person referred to in subparagraph (i);
[Paragraph (h) inserted by section 29 of Act 23 of 2018 effective on 1 January 2019, applies in respect of any trade carried on which commenced on or after that date]
“Qualifying distribution” definition of section 25BB of ITA
“qualifying distribution”, in respect of a year of assessment of a company that is a REIT or a controlled company as at the end of a year of assessment, means any dividend (other than a dividend contemplated in paragraph (b) of the definition of “dividend”) paid or payable in respect of an equity share, or interest incurred in respect of a debenture forming part of a linked unit in that company, if the amount thereof is determined with reference to the financial results of that company as reflected in the financial statements prepared for that year of assessment if-
[Definition of “qualifying distribution” amended by section 45(a) of Act 17 of 2017 and by section 29(1)(a) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of years of assessment commencing on or after that date]
(a) that year of assessment is the first year of assessment and at least 75 per cent of the gross income received by or accrued to a company during that first year of assessment that the company qualifies as a REIT or controlled company, consists of rental income; and
[Paragraph (a) substituted by section 50 of Act 25 of 2015 and section 49 of Act 23 of 2018 effective on 17 January 2019]
(b) in any other case, at least 75 per cent of the gross income received by or accrued to a REIT or a controlled company in the preceding year of assessment consists of rental income:
Provided that any amount that must be included in the income of the REIT or controlled company in terms of section 9D(2) must not be included in the gross income of the REIT or controlled company in respect of that year of assessment for the purposes of this definition;
“Qualifying equity share” definition of section 8B of ITA
‘qualifying equity share’ in relation to a person means an equity share acquired in a year of assessment in terms of a broad-based employee share plan, where the market value of all equity shares (as determined on the relevant date of grant of each equity share and excluding the market value of any qualifying equity share acquired in the circumstances contemplated in subsection (2A)), which were acquired by that person in terms of that plan in that year and the four immediately preceding years of assessment, does not in aggregate exceed R50 000.
“Qualifying interest” definition of section 42 of ITA
‘qualifying interest’ of a person means-
(a) an equity share held by that person in a company which is a listed company or will become a listed company within 12 months after the transaction as a result of which that person holds that share;
(b) an equity share held by that person in a portfolio of a collective investment scheme in securities;
(c) equity shares held by that person in a company that constitute at least 10 per cent of the equity shares and that confer at least 10 per cent of the voting rights in that company;
[Paragraph (c) substituted by section 36(a) of Act 17 of 2023]
(d) an equity share held by that person in a company which forms part of the same group of companies or that person; or
[Paragraph (d) substituted by section 36(b) of Act 17 of 2023]
(e) any equity share held in a portfolio of a hedge fund collective investment scheme.
[Paragraph (e) added by section 62 of Act 25 of 2015 effective on 1 April 2015]
“Qualifying investor” definition of section 1 of ITA
“qualifying investor” means a member of a partnership or foreign partnership or a beneficiary of a trust if the liability of the member or beneficiary to any creditor of the partnership, trust or foreign partnership is limited to the amount that the member or beneficiary has contributed or undertaken to contribute to the partnership, trust or foreign partnership, unless that member or beneficiary-
(a) participates in the effective management of the trade or business of the partnership, trust or foreign partnership;
(b) has the authority to act on behalf of-
(i) the partnership or foreign partnership;
(ii) the members of the partnership or foreign partnership; or
(iii) the trust; or
(c) renders any services to or on behalf of the partnership, trust or foreign partnership;