3.     PERSONS THAT DO NOT QUALIFY AS MICRO BUSINESSES

A person does not qualify as a micro business for a year of assessment where-

 

(a)     that person at any time during that year of assessment holds any shares or has any interest in the equity of a company other than a share or interest described in paragraph 4;

(b)     more than 20 per cent of that person’s total receipts during that year of assessment consists of –

(i)      where that person is a natural person (or the deceased or insolvent estate of a natural person that was a registered micro business at the time of death or insolvency), income from the rendering of a professional service; and

(ii)     where that person is a company, investment income and income from the rendering of a professional service;

(c)     at any time during that year of assessment that person is a ‘personal service provider’ or a ‘labour broker’, as defined in the Fourth Schedule, other than a labour broker in respect of which a certificate of exemption has been issued in terms of paragraph 2(5) of that Schedule;

(d)     ……….

(e)     the total of all amounts received by that person from the disposal of-

(i)      immovable property used mainly for business purposes; and

(ii)     any other asset of a capital nature used mainly for business purposes, other than any financial instrument,

exceeds R1,5 million over a period of three years comprising the current year of assessment and the immediately preceding two years of assessment, or such shorter period during which that person was a registered micro business;

(f)      in the case of a company-

(i)      its year of assessment ends on a date other than the last day of February;

(ii)     at any time during its year of assessment, any holder of shares in that micro business is a person other than a natural person (or the deceased or insolvent estate of a natural person);

(iii)    at any time during its year of assessment, any holder of shares in that micro business holds any shares or has any interest in the equity of any other company other than a share or interest described in paragraph 4 : Provided that the provisions of this item do not apply to the holding of any shares in or interest in the equity of a company, if the company-

(aa)    has not during any year of assessment –

(A)    carried on any trade; and

(B)     owned assets, the total market value of which exceeds R5000; or

(bb)   has taken the steps contemplated in section 41(4) to liquidate, wind up or deregister: Provided further that this paragraph ceases to apply if the company has at any stage withdrawn any step so taken or does anything to invalidate any step so taken, with the result that the company will not be liquidated, wound up or deregistered;

(iv)    it is a public benefit organisation approved by the Commissioner in terms of section 30;

[Item (iv) substituted by section 89 of Act 25 of 2015 effective on 8 January 2016]

(v)     it is a recreational club approved by the Commissioner in terms of section 30A;

(vi)    it is an association approved by the Commissioner in terms of section 30B; or

[Item (vi) added by section 89 of Act 25 of 2015 effective on 8 January 2016]

(vii)   it is a small business funding entity approved by the Commissioner in terms of section 30C;

[Item (vii) added by section 89 of Act 25 of 2015 effective on 8 January 2016]

(g)     in the case of a person that is a partner in a partnership during that year of assessment-

(i)      any of the partners in that partnership is not a natural person;

(ii)     that person is a partner in more than one partnership at any time during that year of assessment; or

(iii)    the qualifying turnover of that partnership for that year of assessment exceeds the amount described in paragraph 2.