Category: Definitions – ITA

“Return of capital” definition of section 1 of ITA

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“return of capital” means any amount transferred by a company that is a resident for the benefit or on behalf of any person in respect of any share in that company to the extent that that transfer results in a reduction of contributed tax capital of the company, whether that amount is transferred-

(a)       by way of a distribution made by; or

(b)       as consideration for the acquisition of any share in,

that company, but does not include any amount so transferred to the extent that the amount so transferred constitutes-

(i)      shares in the company; or

(ii)   an acquisition by the company of its own securities by way of a general repurchase of securities as contemplated in subparagraph (b) of paragraph 5.67(B) of section 5 of the JSE Limited Listings Requirements, where that acquisition complies with any applicable requirements prescribed by paragraph s 5.68 and 5.72 to 5.81 of section 5 of the JSE Limited Listings Requirements or by way of a general repurchase of securities as contemplated in the listings requirements of any other exchange, licensed under the Financial Markets Act, that are substantially the same as the requirements prescribed by the JSE Limited Listings Requirements, where that acquisition complies with the applicable requirements of that exchange;

[Paragraph (ii) substituted by section 2(1)(l) of Act 17 of 2017 and by section 2(1)(g) of Act 34 of 2019 deemed effective on 1 March, 2019]

[Definition of “return of capital” inserted by section 7 of Act 24 of 2011 and substituted by section 2 of Act 17 of 2017 effective on 18 December 2017]

“Road pavement” definition of section 24G of ITA

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“road pavement” means the road surface, road shoulders, sub base, base course, wearing courses, road signage, road markings, lighting, guard rails, tolling equipment, emergency telephone systems, emergency telephone repeater stations, access roads to emergency telephone repeater station sites and other parts and road furniture of a toll road, excluding any permanent work or ancillary service;

“Royalty” definition of section 49A of ITA

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“royalty” means any amount that is received or accrues in respect of-

 

(a)     the use or right of use of or permission to use any intellectual property as defined in section 23I; or

 

(b)     the imparting of or the undertaking to impart any scientific, technical, industrial or commercial knowledge or information, or the rendering of or the undertaking to render any assistance or service in connection with the application or utilisation of such knowledge or information.

“Ruling exchange rate” definition of section 24I of ITA

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“ruling exchange rate” means, in relation to an exchange item, where such exchange item is –

(a)     a debt or a preference share in a foreign currency on-

(i)      transaction date, the spot rate on such date;

(ii)     the date it is translated, the spot rate on such date; or

(iii)    the date it is realised, the spot rate on such date:

Provided that where the rate prescribed in respect of a debt or a preference share in terms of this definition is the spot rate on transaction date or the spot rate on the date on which such debt is realised, and any consideration paid or incurred or received or accrued in respect of the acquisition or disposal of such debt or preference share was determined by applying a rate other than such spot rate on transaction date or date realised, such spot rate shall be deemed to be the acquisition rate or disposal rate, as the case may be;

[Paragraph (a) amended by section 53(1)(d) and (e) of Act 22 of 2012 and by section 22(1)(c) and (d) of Act 5 of 2026 deemed effective on 1 January, 2025 and applicable in respect of years of assessment commencing on or after that date]

(b)     a forward exchange contract on –

(i)      transaction date, the forward rate in terms of such forward exchange contract;

(ii)     the date it is translated, the market-related forward rate available for the remaining period of such forward exchange contract or in respect of a forward exchange contract which is an affected contract, the forward rate in terms of such forward exchange contract;

(iii)    the date it is realised, the spot rate on such date; or

(c)     a foreign currency option contract on–

(i)      transaction date, a nil rate;

(ii)     the date it is translated–

(aa)   in relation to a foreign currency option contract which is not an affected contract, the rate obtained by dividing the market value of such foreign currency option contract on that date by the foreign currency amount as specified in such foreign currency option contract; or

(bb)   in relation to a foreign currency option contract which is an affected contract, the rate obtained by dividing any amount included or deducted, as the case may be, in terms of subsection (3)(b) by the foreign currency amount, as specified in such affected contract;

(iii)    the date it is realised, the rate obtained by dividing the market value of such foreign currency option contract on that date by the foreign currency amount as specified in such foreign currency option contract: Provided that where such foreign currency option contract is realised by the disposal thereof, the rate shall be obtained by dividing the amount received or accrued as a result of the disposal of such foreign currency option contract, by the foreign currency amount as specified in such foreign currency option contract:

(d)     an amount which constitutes a unit of currency, on-

(i)      transaction date, the spot rate on that date;

(ii)     the date it is translated, the spot rate on that date; or

(iii)    the date it is realised, the spot rate on that date:

: Provided that the Commissioner may, having regard to the particular circumstances of the case, prescribe an alternative rate to any of the aforementioned prescribed rates to be applied by a person in such particular circumstances, if such alternative rate is used for the purposes of financial reporting pursuant to IFRS;

[Proviso substituted by section 44 of Act 25 of 2015 effective on 8 January 2016]

“Ruling price” definition of Eighth Schedule

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“ruling price” means-

(a)     in the case of a financial instrument listed on a recognised exchange in the Republic, the last sale price of that financial instrument at close of business of the exchange, unless there is a higher bid or a lower offer on that day subsequent to the last sale in which case the price of that higher bid or lower offer will prevail; or

(b)     in the case of a financial instrument listed on a recognised exchange outside the Republic, the ruling price of that financial instrument as determined in item (a) and if the ruling price is not determined in this manner by that exchange, the last price quoted in respect of that financial instrument at close of business of that exchange.

“Sale and leaseback arrangement” definition of section 23G of ITA

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“sale and leaseback arrangement” means any arrangement whereby –

 

(a)     any person disposes of any asset (whether directly or indirectly) to any other person; and

 

(b)     such person or any connected person in relation to such person leases (whether directly or indirectly) such asset from such other person.