Category: Eighth Schedule – Determination of taxable capital gains and assessed capital losses

EIGHTH SCHEDULE

 

Eighth Schedule inserted by section 38 of Act 5 of 2001.

“Local currency” definition of paragraph 43 of Eighth Schedule

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“local currency” means –

 

(a)     in relation to a permanent establishment of a person, the functional currency of that permanent establishment (other than the currency of any country in the common monetary area);

 

(b)     in relation to a headquarter company, in respect of amounts which are not attributable to a permanent establishment outside the Republic, the functional currency of that headquarter company;

 

(c)     in relation to a domestic treasury management company, in respect of amounts which are not attributable to a permanent establishment outside the Republic, the functional currency of that domestic treasury management company;

 

(d)     in relation to an international shipping company defined in section 12Q, in respect of amounts which are not attributable to a permanent establishment outside the Republic, the functional currency of that international shipping company; or

 

(e)     in any other case, the currency of the Republic.

“Project” definition of paragraph 37H of Eighth Schedule

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“project” means a project which in the opinion of the board –

 

(a)     represents the manufacturing of any products, goods, articles or any other things as classified in ‘Major Division 3: Manufacturing’ of the Standard Industrial Classification of all Economic Activities (Fifth Edition) issued by the Central Statistical Services in January 1993; and

 

(b)     meets the investment requirements prescribed by the regulations under subsection (14) (a);

“Qualifying company” definition of paragraph 37H of Eighth Schedule

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“qualifying company” means any company which –

 

(a)     is incorporated on or after the commencement date;

 

(b)     commences the carrying on of one qualifying project for the first time on or after the commencement date; and

 

(c)     has the sole object of carrying on one qualifying project as from the date of such incorporation and which does not carry on any trade other than such qualifying project;

“Tax holiday status” definition of paragraph 37H of Eighth Schedule

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“tax holiday status” means the status whereby in respect of a year of assessment ending –

 

(a)     during the period of six months ending 31 March 1997, the income of a qualifying company is reduced in accordance with subsection (12); or

 

(b)     after 31 March 1997, the rate of normal tax on each rand of the taxable income received by or accrued to or in favour of a qualifying company is fixed at a rate of zero per cent in terms of section 5.