Category: Section 11 (ITA) – General deductions allowed in determination of taxable income

Section 11

 

  1. Paragraph (a) substituted by section 15 of Act 59 of 2000.

 

  1. Paragraph (b) substituted by section 13 of Act 129 of 1991 and deleted by section 15 of Act 59 of 2000.

 

  1. Paragraph (bA) inserted by section 9 of Act 96 of 1981, substituted by section 11 of Act 19 of 2001 and deleted by section 30 of Act 24 of 2011 effective on 1 January 2012.

 

  1. Paragraph (bB) inserted by section 11 of Act 121 of 1984, amended by section 8 of Act 90 of 1988, section 8 of Act 70 of 1989 and section 12 of Act 21 of 1995 and deleted by section 14 of Act 17 of 2009.

 

  1. Paragraph (bC) inserted by section 27 of Act 45 of 2003 and deleted by section 16 of Act 32 of 2004.

 

  1. Subparagraph (c)(ii) substituted by section 18 of Act 60 of 2008.

 

  1. Paragraph (c) substituted by section 10 of Act 88 of 1971.

 

  1. Subparagraph (cA)(iv) substituted by section 18 of Act 60 of 2008 effective on1 March 2009.

 

  1. Paragraph (cA) inserted by section 22 of Act 30 of 2000.

 

  1. Words preceding the proviso of subparagraph (e)(i) substituted by section 10 of Act 3 of 2008, section 19 of Act 7 of 2010 and section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (e)(i) deleted by section 19 of Act 7 of 2010.

 

  1. Paragraph (e)(iA) inserted by section 18 of Act 31 of 2005 and substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (e)(iiA) inserted by section 12 of Act 85 of 1974 and substituted by section 22 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subparagraph (e)(iii) substituted by section 12 of Act 55 of 1966 and section 10 of Act 21 of 1994.

 

  1. Subparagraph (e)(iiiA) inserted by section 9 of Act 96 of 1981.

 

  1. Subparagraph (e)(iv) substituted by section 9 of Act 113 of 1977 and deleted by section 19 of Act 7 of 2010.

 

  1. Subparagraph (e)(vi) substituted by section 12 of Act 55 of 1966, section 9 of Act 113 of 1977 and section 11 of Act 121 of 1984 and deleted by section 11 of Act 8 of 2007.

 

  1. Subparagraph (e)(vii) added by section 11 of Act 121 of 1984 and amended by section 19 of Act 7 of 2010.

 

  1. Subparagraph (e)(viii) added by section 9 of Act 113 of 1993, substituted by section 5 of Act 140 of 1993, section 6 of Act 9 of 2005 and section 11 of Act 8 of 2007 and deleted by section 17 of Act 35 of 2007.

 

  1. Subparagraph (e)(ix) added by section 15 of Act 59 of 2000 and substituted by section 18 of Act 60 of 2008.

 

  1. Paragraph (e) amended by section 9 of Act 90 of 1962 and section 9 of Act 90 of 1964, substituted by section 11 of Act 88 of 1965 and amended by section 8 of Act 90 of 1988, section 11 of Act 101 of 1990, section 15 of Act 59 of 2000, section 6 of Act 9 of 2005 and section 18 of Act 31 of 2005.

 

  1. Subparagraph (f)(ii)bis inserted by section 9 of Act 90 of 1962.

 

  1. Subparagraph (f)(iii) substituted by section 14 of Act 89 of 1969, section 13 of Act 129 of 1991, section 20 of Act 53 of 1999 and section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (f)(iv) amended by section 9 of Act 90 of 1962 and section 14 of Act 17 of 2009.

 

  1. Subparagraph (f)(v) added by section 14 of Act 17 of 2009.

 

  1. Item (f)(v)(aa) amended by section 9 of Act 90 of 1962 and section 14 of Act 17 of 2009.

 

  1. Item (f)(v)(bb) substituted by section 10 of Act 94 of 1983.

 

  1. Item (f)(v)(cc) amended by section 9 of Act 90 of 1962.

 

  1. Item (f)(v)(dd) added by section 11 of Act 121 of 1984 and substituted by section 14 of Act 17 of 2009.

 

  1. Subparagraph (g)(ii) substituted by section 10 of Act 94 of 1983.

 

  1. Subparagraph (g)(iii) substituted by section 19 of Act 7 of 2010 effective on 2 November 2010.

 

  1. Subparagraph (g)(iv) added by section 9 of Act 90 of 1962 and substituted by section 9 of Act 113 of 1977 and section 14 of Act 17 of 2009.

 

  1. Subparagraph (g)(v) added by section 7 of Act 91 of 1982 and deleted by section 19 of Act 7 of 2010 effective on 2 November 2010.

 

  1. Subparagraph (g)(vi) added by section 10 of Act 94 of 1983 and substituted by section 16 of Act 32 of 2004, section 14 of Act 17 of 2009 and section 19 of Act 7 of 2010 effective on 2 November 2010.

 

  1. Subparagraph (g)(vii) added by section 16 of Act 32 of 2004 and substituted by section 19 of Act 7 of 2010.

 

  1. Subparagraph (gA)(i) substituted by section 13 of Act 129 of 1991, section 20 of Act 53 of 1999 and section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (gA)(ii) substituted by section 20 of Act 53 of 1999, section 15 of Act 59 of 2000 and section 27 of Act 31 of 2013 effective on 12 December.

 

  1. Subparagraph (gA)(iii) substituted by section 9 of Act 113 of 1993 and section 11 of Act 8 of 2007.

 

  1. Subitem (gA)(iii)(aa)(AA) substituted by section 11 of Act 8 of 2007.

 

  1. Subitem (gA)(iii)(aa)(BB) substituted by section 11 of Act 8 of 2007.

 

  1. Item (aa) amended by section 9 of Act 36 of 1996, substituted by section 20 of Act 53 of 1999 and amended by section 14 of Act 30 of 2002.

 

  1. Item (gA)(iii)(bb) substituted by section 10 of Act 94 of 1983.

 

  1. Subitem (gA)(iii)(cc)(A) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subitem (gA)(iii)(cc)(B) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Item (gA)(iii)(cc) added by section 8 of Act 90 of 1988 and amended by section 9 of Act 113 of 1993 and section 15 of Act 59 of 2000.

 

  1. Item (gA)(iii)(dd) added by section 9 of Act 113 of 1993 and substituted by section 5 of Act 140 of 1993 and section 15 of Act 59 of 2000.

 

  1. Item (gA)(iii)(ee) added by section 20 of Act 53 of 1999 and substituted by section 11 of Act 8 of 2007.

 

  1. Item (gA)(iii)(ff) added by section 27 of Act 45 of 2003.

 

  1. Paragraph (gA) inserted by section 12 of Act 55 of 1966, substituted by section 14 of Act 89 of 1969 and amended by section 10 of Act 94 of 1983, section 15 of Act 59 of 2000 and section 11 of Act 8 of 2007.

 

  1. Paragraph (gB) inserted by section 12 of Act 55 of 1966, amended by section 14 of Act 89 of 1969, substituted by section 13 of Act 129 of 1991, section 20 of Act 53 of 1999 and section 15 of Act 59 of 2000, amended by section 27 of Act 45 of 2003 and substituted by section 11 of Act 20 of 2006, section 11 of Act 8 of 2007, section 17 of Act 35 of 2007 and by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (gC)(i) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (gC)(ii) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (gC)(iii) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (gC)(iv) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (gC)(v) substituted by section 11 of Act 8 of 2007.

 

  1. Subparagraph (gC)(v)(aa)(A) substituted by section 11 of Act 8 of 2007.

 

  1. Subparagraph (gC)(v)(aa)(B) substituted by section 11 of Act 8 of 2007.

 

  1. Paragraph (gC)(v)(aa) substituted by section 16 of Act 32 of 2004 and amended by section 2 of Act 8 of 2007and section 1 of Act 3 of 2008.

 

  1. Paragraph (gC)(v)(bb) substituted by section 16 of Act 32 of 2004 and deleted by section 17 of Act 35 of 2007.

 

  1. Paragraph (gC) inserted by section 9 of Act 113 of 1977, deleted by section 15 of Act 59 of 2000, inserted by section 27 of Act 45 of 2003 and amended by section 16 of Act 32 of 2004 and section 11 of Act 8 of 2007.

 

  1. Paragraph (gD) inserted by section 18 of Act 60 of 2008 effective on 1 January 2008 and substituted by section 19 of Act 7 of 2010 and section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (h)(i) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Subparagraph (h)(i) substituted by section 27 of Act 31 of 2013 effective on 12 December 2013.

 

  1. Paragraph (h) substituted by section 8 of Act 90 of 1972 and amended by section 10 of Act 94 of 1983.

 

  1. Paragraph (hA) inserted by section 13 of Act 129 of 1991, substituted by section 12 of Act 28 of 1997, section 27 of Act 45 of 2003, and section 11 of Act 20 of 2006, amended by section 11 of Act 8 of 2007 and deleted by section 30 of Act 24 of 2011 effective on 1 January 2012.

 

  1. Paragraph (hB) inserted by section 11 of Act 20 of 2006.

 

  1. Paragraph (i) substituted by section 14 of Act 89 of 1969, section 10 of Act 94 of 1983, section 9 of Act 113 of 1993 and section22 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (j) substituted by section 14 of Act 89 of 1969, amended by section 10 of Act 94 of 1983 and section 18 of Act 31 of 2005 and substituted by section22 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Subparagraph (k)(i) substituted by section 5 of Act 101 of 1978, amended by section 8 of Act 104 of 1979 and section 9 of Act 96 of 1981, substituted by section 10 of Act 94 of 1983, amended by section 30 of Act 30 of 1998, section 2 of Act 8 of 2007 and section 1 of Act 3 of 2008 and substituted by section 10 of Act 3 of 2008.

 

  1. Item (k)(ii)(aa) amended by section 11 of Act 121 of 1984, substituted by section 18 of Act 31 of 2005 and amended by section 2 of Act 8 of 2007 and section 1 of Act 3 of 2008.

 

  1. Item (k)(ii)(bb) added by section 9 of Act 96 of 1981.

 

  1. Item (k)(ii)(cc) added by section 10 of Act 94 of 1983.

 

  1. Item (k)(ii)(dd) added by section 10 of Act 94 of 1983 and substituted by section 14 of Act 17 of 2009 and section 27 of Act 31 of 2013 effective on 1 March 2013.

 

  1. Paragraph (k) amended by section 8 of Act 72 of 1963 and substituted by section 12 of Act 55 of 1966, section 9 of Act 65 of 1973, section 9 of Act 69 of 1975 and section 9 of Act 113 of 1977 and amended by section 9 of Act 96 of 1981.

 

  1. Subparagraph (l)(v) substituted by section 10 of Act 94 of 1983 and section 10 of Act 3 of 2008.

 

  1. Subparagraph (l)(vi) of the proviso deleted by section 271 of Act 28 of 2011 effective on 1 October 2012.

 

  1. Paragraph (l) substituted by section 8 of Act 104 of 1979 and amended by section 30 of Act 30 of 1998.

 

  1. Paragraph (lA) inserted by section 16 of Act 32 of 2004 and amended by section 18 of Act 31 of 2005, ssection 2 and 11 of Act 8 of 2007, section 1 of Act 3 of 2008 and section 18 of Act 60 of 2008 effective on 21 February 2008.

 

  1. Subparagraph (m)(ii) substituted by section 9 of Act 113 of 1993.

 

  1. Paragraph (m) substituted by section 14 of Act 89 of 1969 and section 5 of Act 101 of 1978 and amended by section 9 of Act 96 of 1981, section 11 of Act 121 of 1984 and section 11 of Act 8 of 2007.

 

  1. Subitem (n)(i)(aa)(A) substituted by section 30 of Act 24 of 2011 effective on 1 March 2011.

 

  1. Paragraph (cc) of the proviso to subpar. (n)(i) substituted by section 22 of Act 22 of 2012 effective on 1 March 2014 – comes into operation in terms of section 22 of Act 22 of 2012 as substituted by section 195 of Act 31 of 2013.

 

  1. Paragraph (n) amended by section 8 of Act 72 of 1963, substituted by section 12 of Act 55 of 1966 and section 9 of Act 76 of 1968, amended by section 9 of Act 65 of 1973 and section 9 of Act 69 of 1975, substituted by section 9 of Act 113 of 1977, amended by section 5 of Act 101 of 1978, section 8 of Act 104 of 1979, section 7 of Act 91 of 1982, section 10 of Act 94 of 1983, section 11 of Act 121 of 1984, section 8 of Act 90 of 1988, section 8 of Act 70 of 1989, section 11 of Act 101 of 1990, section 11 of Act 141 of 1992, section 9 of Act 113 of 1993, section 12 of Act 21 of 1995, section 20 of Act 53 of 1999, section 2 and section 11 of Act 8 of 2007, section 1 and section 10 of Act 3 of 2008, section 18 of Act 60 of 2008 and substituted by section 14 of Act 17 of 2009 effective on 1 March 2009 to the extent that it amends references to the Second Schedule and effective on 1 March 2010 in any other case..

 

  1. Paragraph (nA) inserted by section 18 of Act 60 of 2008.

 

  1. Paragraph (nB) inserted by section 18 of Act 60 of 2008.

 

  1. Subparagraph (o)(i) substituted by section 11 of Act 8 of 2007 and section 17 of Act 35 of 2007.

 

  1. Paragraph (o)(ii)(aa) substituted by section 9 of Act 16 of 2004.

 

  1. Paragraph (o)(ii)(bb) substituted by section 9 of Act 16 of 2004.

 

  1. Paragraph (o)(ii)(dd) amended by section 17 of Act 35 of 2007.

 

  1. Further Proviso to paragraph (o) added by section 17 of Act 35 of 2007.

 

  1. Paragraph (o) substituted by section 11 of Act 88 of 1965, section 12 of Act 55 of 1966 and section 14 of Act 89 of 1969, amended by section 12 of Act 85 of 1974, section 9 of Act 113 of 1977, section 9 of Act 96 of 1981, section 7 of Act 91 of 1982, section 10 of Act 94 of 1983, section 11 of Act 121 of 1984, section 10 of Act 85 of 1987, section 8 of Act 90 of 1988, section 11 of Act 101 of 1990, section 10 of Act 21 of 1994, section 22 of Act 30 of 2000, section 15 of Act 59 of 2000, section 10 of Act 19 of 2001 and section 27 of Act 60 of 2001, substituted by section 27 of Act 45 of 2003 and amended by section 18 of Act 31 of 2005 and section 17 of Act 35 of 2007.

 

  1. Paragraph (p) amended by section 8 of Act 90 of 1988 and section 27 of Act 45 of 2003 and deleted by section 18 of Act 60 of 2008.

 

  1. Paragraph (q) amended by section 10 of Act 94 of 1983, section 9 of Act 113 of 1993 and section 27 of Act 45 of 2003 and deleted by section 18 of Act 60 of 2008.

 

  1. Paragraph (r) amended by section 9 of Act 90 of 1962 and section 8 of Act 72 of 1963, substituted by section 11 of Act 95 of 1967, deleted by section 10 of Act 89 of 1969, inserted by section 27 of Act 45 of 2003 and deleted by section 16 of Act 32 of 2004.

 

  1. Paragraph (r)bis inserted by section 9 of Act 90 of 1964 and deleted by section 11 of Act 95 of 1967.

 

  1. Paragraph (s) substituted by section 14 of Act 89 of 1969, section 12 of Act 28 of 1997 and section 19 of Act 74 of 2002 and deleted by section 22 of Act 22 of 2012 effective on 1 April 2013.

 

  1. Paragraph (t) amended by section 8 of Act 72 of 1963, substituted by section 9 of Act 76 of 1968, amended by section 8 of Act 90 of 1972, section 12 of Act 85 of 1974, section 9 of Act 69 of 1975, section 9 of Act 113 of 1977, section 8 of Act 104 of 1980, section 7 of Act 91 of 1982, section 10 of Act 94 of 1983, section 2 of Act 8 of 2007 and section 1 of Act 3 of 2008 and deleted by section 18 of Act 60 of 2008 effective on 21 Oct 2008.

 

  1. Paragraph (u) substituted by section 10 of Act 88 of 1971 and section 11 of Act 121 of 1984, amended by section 9 of Act 113 of 1993 and section 14 of Act 30 of 2002 and deleted by section 9 of Act 16 of 2004 effective on 1 January 2005.

 

  1. Paragraph (uA) inserted by section 11 of Act 121 of 1984 and deleted by section 10 of Act 21 of 1994.

 

  1. Paragraph (v) substituted by section 12 of Act 55 of 1966 and section 10 of Act 88 of 1971 and deleted by section 9 of Act 65 of 1973.

 

  1. Words preceding subparagraph (w)(i) substituted by section 22 of act 22 of 2012 effective on 1 March 2012.
  3. Paragraph (w) substituted by section 14 of Act 89 of 1969 and section 10 of Act 89 of 1969, amended by section 10 of Act 88 of 1971, section 7 of Act 91 of 1982, section 10 of Act 94 of 1983, section 46 of Act 97 of 1986, section 22 of Act 30 of 2000 and section 19 of Act 74 of 2002, substituted by section 19 of Act 7 of 2010 effective on 1 January 2011 (amendment was deleted by section 161 of Act 24 of 2011 effective on 1 January 2011) and substituted by section 30 of Act 24 of 2011 effective on 1 March 2012.

Section 11(gC) of ITA

Posted on by admin_kmos

(gC)  an allowance in respect of any expenditure actually incurred by the taxpayer during any year of assessment commencing on or after 1 January 2004 to acquire (otherwise than by way of devising, developing or creating) any-

 

(i)      invention or patent as defined in the Patents Act;

 

(ii)     design as defined in the Designs Act;

 

(iii)    copyright as defined in the Copyright Act;

 

(iv)    other property which is of a similar nature (other than Trade Marks as defined in the Trade Marks Act); or

 

(v)     knowledge essential to the use of such patent, design, copyright or other property or the right to have such knowledge imparted,

 

which shall be allowed during the year of assessment in which that invention, patent, design, copyright, other property or knowledge is brought into use for the first time by the taxpayer for the purposes of the taxpayer’s trade, if that invention, patent, design, copyright, other property or knowledge, as the case may be, is used by the taxpayer in the production of his or her income: Provided that-

 

(aa)   where that expenditure actually incurred by the taxpayer exceeds R5 000, that allowance shall not exceed in any year of assessment-

 

(A)    five per cent of the amount of the expenditure in respect of any invention, patent, copyright or other property of a similar nature or any knowledge essential to the use of such invention, patent, copyright or other property or the right to have such knowledge imparted; or

 

(B)    10 per cent of the amount of the expenditure in respect of any design or other property of a similar nature or any knowledge essential to the use of such design or other property or the right to have such knowledge imparted;

Section 11(gD) of ITA

Posted on by admin_kmos

(gD)  where that trade constitutes the provision of telecommunication services, the exploration, production or distribution of petroleum or the provision of gambling facilities, any expenditure (other than in respect of infrastructure) incurred to acquire a licence from the government of the Republic in the national, provincial or local sphere, contemplated in section 10(1)(a) or (b), or an institution or entity contemplated in Schedule 1 or Part A or C of Schedule 3 to the Public Finance Management Act where that expenditure is incurred in terms of the licence and the licence is required to carry on that trade, which deduction must not exceed for any one year such portion of the expenditure as is equal to the amount of the expenditure divided by the number of years for which the taxpayer has the right to the licence after the date on which the expenditure was incurred, or 30, whichever is the lesser;

Section 11(h) of ITA

Posted on by admin_kmos

(h)     such allowance in respect of amounts included in the taxpayer’s gross income under paragraph (g) or paragraph (h) of the definition of “gross income” in section 1 as the Commissioner may deem reasonable having regard to any special circumstances of the case and, in the case of an amount so included under the said paragraph (h), to the original period for which the right of use or occupation was granted or, in the case of any amount so included under the said paragraph (h) in consequence of an agreement concluded on or after 1 July 1983, to the number of years taken into account in the determination of the relevant allowance granted to any other person under the provisions of paragraph (g) of this section: Provided that where there has on or after the twenty–ninth day of March, 1972, accrued to the taxpayer the right to have improvements effected on land or to buildings by any other person and an amount is required to be included in the taxpayer’s gross income under the said paragraph (h) with respect to such improvements, no allowance shall be made to the taxpayer under this paragraph in respect of such amount, if –

 

(i)      the taxpayer or such other person is a company and such other person or the taxpayer, as the case may be, is interested in more than 50 per cent of any class of shares issued by such company, whether directly as a holder of shares in that company or indirectly as a holder of shares in any other company; or

 

(ii)     both the taxpayer and such other person are companies and any third person is interested in more than 50 per cent of any class of shares issued by one of those companies and in more than 50 per cent of any class of shares issued by the other company, whether directly as a holder of shares in the company by which the shares in question were issued or indirectly as a holder of shares in any other company;

Section 11(hB) of ITA

Posted on by admin_kmos

(hB)  an allowance in respect of expenditure actually incurred and paid in the production of income to discharge all consideration, royalties or compensation otherwise payable to a community or natural person in respect of any existing consideration, contractual royalty, future consideration or compensation that accrued to that community or natural person as contemplated in Item 11 of Schedule II of the Petroleum Resources Development Act, 2002 (Act No. 28 of 2002): Provided that for any year of assessment, the allowance shall not exceed an amount equal to the expenditure incurred and paid divided by the number of years for which all consideration, royalties or compensation otherwise payable has been discharged;

Section 11(i) of ITA

Posted on by admin_kmos

(i)      the amount of any debt due to the taxpayer which has during the year of assessment become bad, provided such amount is included in the current year of assessment or was included in previous years of assessment in the taxpayer’s income;

[Paragraph (i) substituted by section 14(1)(d) of Act 89 of 1969, by section 10(1)(g) of Act 94 of 1983, by section 9(1)(e) of Act 113 of 1993, by section 22(1)(b) of Act 22 of 2012 and by section 17(1)(a) of Act 43 of 2014]

Section 11(j) of ITA

Posted on by admin_kmos

(j)      an allowance in respect of any debt due to the taxpayer, if that debt would have been allowed as a deduction under any other provision of this Part had that debt become bad, of an amount equal to-

(i)      if IFRS 9 is applied to that debt by that person for financial reporting purposes, other than in respect of lease receivables as defined in IFRS 9 that have not been included in income, the sum of-

(aa)   40 per cent of the aggregate of-

(A)    the loss allowance relating to impairment that is measured at an amount equal to the lifetime expected credit loss, as contemplated in IFRS 9, in respect of debt; and

[Sub-item (A) substituted by section 13(1)(b) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable in respect of years of assessment commencing on or after that date]

(B)    the amounts of debts included in the income of the taxpayer in the current or any previous year of assessment that are disclosed as bad debt written off for financial reporting purposes and that have not been allowed as a deduction under section 11(a) or (i) for the current or any previous year of assessment; and

(bb)   25 per cent of the loss allowance relating to impairment, as contemplated in IFRS 9, in respect of debt other than in respect of debt taken into account under item (aa); or

[Subparagraph (i) amended by section 13(1)(a) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable in respect of years of assessment commencing on or after that date. Item (bb) substituted by section 13(1)(c) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable in respect of years of assessment commencing on or after that date]

(ii)     if IFRS 9 is not applied to that debt by that person for financial reporting purposes, the sum of-

(aa)   40 per cent of so much of any debt, other than a debt contemplated in subparagraph (i), due to the taxpayer, if that debt is 120 days or more in arrears, after taking into account the value of any security in respect of that debt; and

[Item (aa) substituted by section 13(1)(d) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of years of assessment commencing on or after that date]

(bb)   25 per cent of so much of any debt, other than a debt contemplated in subparagraph (i) or item (aa), due to the taxpayer, if that debt is 60 days or more in arrears, after taking into account the value of any security in respect of that debt:

[Item (bb) substituted by section 13(1)(d) of Act 23 of 2020 effective on 1 January, 2021 and applicable in respect of years of assessment commencing on or after that date]

Provided that an allowance under this paragraph must be included in the income of the taxpayer in the following year of assessment: Provided further that the Commissioner may, on application by a taxpayer, issue a directive that the percentage contemplated in subparagraph (i)(aa) or (ii)(aa) may be increased, to a percentage not exceeding 85 per cent after taking into account-

(a)     the history of a debt owed to that taxpayer, including the number of repayments not met, and the duration of the debt;

(b)     steps taken to enforce repayment of the debt;

(c)     the likelihood of the debt being recovered;

(d)     any security available in respect of that debt;

(e)     the criteria applied by the taxpayer in classifying debt as bad; and

(f)      such other considerations as the Commissioner may deem relevant;

[Paragraph (j) substituted by section 14(1)(e) of Act 89 of 1969, amended by section 10(1)(h) of Act 94 of 1983 and by section 18(c) of Act 31 of 2005 and substituted by section 22(1)(b) of Act 22 of 2012, by section 25(1)(e) of Act 23 of 2018 and by section 15(1)(a) of Act 34 of 2019]

Section 11(jA) of ITA

Posted on by admin_kmos

(jA)   notwithstanding paragraph (j), an allowance equal to 25 per cent of the loss allowance relating to impairment, as contemplated in IFRS 9, other than in respect of lease receivables as defined in IFRS 9 that have not been included in income, if the person is a covered person, other than a person that is a controlling company as defined in the Banks Act, as determined by applying the criteria in paragraphs (c)(i) to (iii) and (d) of the definition of “covered person” in section 24JB(1): Provided that the allowance must be increased-

(a)     to 85 per cent of so much of that loss allowance relating to impairment as is equal to the amount that is in default, as determined by applying to any credit exposure, including any retail exposure, the criteria in paragraphs (a)(ii) to (vi) and (b) of the definition of ‘default’ as defined in Regulation 67 of the regulations issued in terms of section 90 of the Banks Act (contained in Government Notice No. R.1029 published in Government Gazette No. 35950 of 12 December 2012); and

(b)     to 40 per cent of so much of that loss allowance relating to impairment as is equal to the difference between-

(i)      the amount of the loss allowance relating to impairment that is measured at an amount equal to the lifetime expected credit losses; and

(ii)     the amount that is in default as determined under paragraph (a):

Provided further that the allowance must be included in the income of that person in the following year of assessment: Provided further that the loss allowance relating to impairment must exclude any loss allowance in respect of a financial asset that would not be allowed to be deducted under paragraph (a) or (i) if it became bad;

[Paragraph (jA) inserted by section 19(1)(a) of Act 17 of 2017 and amended by section 25(1)(f) of Act 23 of 2018, by section 15(1)(b) of Act 34 of 2019 and by section 13(1)(e) and (f) of Act 23 of 2020 deemed effective on 28 October, 2020 and applicable in respect of years of assessment commencing on or after that date]

Section 11(k) of ITA

Posted on by admin_kmos

(k)       ……….

[Paragraph (k) amended by section 8 of Act 72 of 1963, substituted by section 12 of Act 55 of 1966, section 9 of Act 65 of 1973, section 9 of Act 69 of 1975 and section 9 of Act 113 of 1977, amended by section 5 of Act 101 of 1978, section 8 of Act 104 of 1979, section 9 of Act 96 of 1981, section 10 of Act 94 of 1983, section 11 of Act 121 of 1984, section 30 of Act 30 of 1998, section 18 of Act 31 of 2005, section 2 of Act 8 of 2007, section 1 of Act 3 of 2008, section 10 of Act 3 of 2008, section 14 of Act 17 of 2009, substituted by section 27(1)(k) of Act 31 of 2013 (substitution by and date of operation in terms of section 27(1)(k) of Act 31 of 2013 substituted by section 122(1)(a) and (b) of Act 43 of 2014), amended by section 2 of Act 2 of 2016 and section 26 of Act 15 of 2016 and deleted by section 19 of Act 17 of 2017 effective on 1 March 2016]

Section 11(l) of ITA

Posted on by admin_kmos

(l)      any amount contributed by a person that is an employer during the year of assessment for the benefit of or on behalf of any employee or former employee of the employer or for any dependant or nominee of a deceased employee or former employee of that employer to any pension fund, provident fund or retirement annuity fund in terms of the rules of that fund: Provided that for the purposes of this paragraph a partner in a partnership must be deemed to be an employee of the partnership and a partnership must be deemed to be the employer of the partners in that partnership;

[Paragraph (l) substituted by section 8 of Act 104 of 1979, amended by section 30 of Act 30 of 1998, section 10 of Act 94 of 1983, section 10 of Act 3 of 2008 and section 271 of Act 28 of 2011 and substituted by section 27(1)(l) of Act 31 of 2013 effective on 1 March 2016 (Date of operation in section 27(1)(l) of Act 31 of 2013 as substituted by section 122(1)(b) of Act 43 of 2014) and section 25 of Act 23 of 2018 effective on 1 March 2018]