12H. Additional deduction in respect of learnership agreements
Category: Section 12H (ITA) – Additional deduction in respect of learnership agreements
Section 12H
- Definition of “associated institution” inserted by section 27 of Act 22 of 2012 effective on 1 January 2013.
- Definition of ‘registered learnership agreement’ amended by section 36 of Act 24 of 2011 effective on 1 January 2012 and substituted by section 27 of Act 22 of 2012 effective on 1 January 2013.
- Paragraph (2)(c) inserted by section 27 of Act 22 of 2012 effective on 1 January 2013.
- Subsection (6) substituted by section 27 of Act 22 of 2012 effective on 1 January 2013.
- Subsection (8) substituted by section 25 of Act 7 of 2010.
- Section 12H inserted by section 18 of Act 30 of 2002, amended by section 32 of Act 45 of 2003, section 22 of Act 31 of 2005, section 25 of Act 9 of 2006, section 2 of Act 8 of 2007, section 1 of Act 3 of 2008 and section 25 of Act 60 of 2008 and substituted by section 23 of Act 17 of 2009.
“Associated institution” definition of section 12H of ITA
(1) For the purposes of this section –
‘associated institution’, in relation to any single employer, means-
(a) where the employer is a company, any other company which is associated with the employer company by reason of the fact that both companies are managed or controlled directly or indirectly by substantially the same persons;
(b) where the employer is not a company, any company which is managed or controlled directly or indirectly by the employer or by any partnership of which the employer is a member; or
(c) any fund established solely or mainly for providing benefits for employees or former employees of the employer or for employees or former employees of the employer and any company which is in terms of paragraph (a) or (b) an associated institution in relation to the employer, but excluding any fund established by a trade union or industrial council and any fund established for postgraduate research otherwise than out of moneys provided by the employer or by any associated institution in relation to the employer;
“Employer” definition of section 12H of ITA
‘employer’ means-
(a) where only one employer is party to a registered learnership agreement, that employer; or
(b) in the case where more than one employer is a party to a registered learnership agreement, the employer which is identified in that agreement as the lead employer;
“Learner” definition of section 12H of ITA
‘learner’ means a learner as defined in section 1 of the Skills Development Act, 1998;
“Registered learnership agreement” definition of section 12H of ITA
‘registered learnership agreement’ means a learnership agreement that is-
(a) registered in accordance with the Skills Development Act, 1998; and
(b) entered into between a learner and an employer before 1 April 2024;
[Paragraph (b) substituted by section 30(1)(a) of Act 15 of 2016 and by section 14(1) of Act 20 of 2021 effective on 1 April, 2022 and applicable in respect of learnership agreements entered into on or after that date]
“SETA” definition of section 12H of ITA
‘SETA’ means a sector education and training authority established in terms of section 9(1) of the Skills Development Act, 1998, and defined as such in section 1 of that Act;
“Skills Development Act, 1998” definition of section 12H of ITA
‘Skills Development Act, 1998’ means the Skills Development Act, 1998 (Act No. 97 of 1998).
Subsections 2, 3, 4, 5, 6, 7 and 8 of section 12H of ITA
(2)
(a) In addition to any deductions allowable in terms of this Act and subject to paragraph (b), where-
(i) during any year of assessment a learner who holds a qualification to which an NQF level from 1 up to and including 6 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer; and
(ii) that agreement was entered into pursuant to a trade carried on by that employer,
there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R40 000.
(b) Where a learner is a party to a registered learnership agreement as contemplated in paragraph (a) for a period of less than 12 full months during the year of assessment contemplated in paragraph (a), the amount that is allowed to be deducted in terms of that paragraph must be limited to an amount which bears to an amount of R40 000 the same ratio as the number of full months that the learner is a party to that agreement bears to 12.
(c) If a registered learnership agreement is registered as contemplated in paragraph (a) of the definition of ‘registered learnership agreement’ within a period of 12 months after the last day of the year of assessment contemplated in paragraph (a), the registered learnership agreement must be deemed to have been so registered on the date on which the registered learnership agreement was entered into as contemplated in paragraph (b) of that definition.
[Subsection (2) amended by section 27 of Act 22 of 2012, substituted by section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(2A)
(a) In addition to any deductions allowable in terms of this Act and subject to paragraph (b), where-
(i) during any year of assessment a learner who holds a qualification to which an NQF level from 7 up to and including 10 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer; and
(ii) that agreement was entered into pursuant to a trade carried on by that employer,
there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R20 000.
(b) Where a learner is a party to a registered learnership agreement as contemplated in paragraph (a) for a period of less than 12 full months during the year of assessment contemplated in paragraph (a), the amount that is allowed to be deducted in terms of that paragraph must be limited to an amount which bears to an amount of R20 000 the same ratio as the number of full months that the learner is a party to that agreement bears to 12.
(c) If a registered learnership agreement is registered as contemplated in paragraph (a) of the definition of ‘registered learnership agreement’ within a period of 12 months after the last day of the year of assessment contemplated in paragraph (a), the registered learnership agreement must be deemed to have been so registered on the date on which the registered learnership agreement was entered into as contemplated in paragraph (b) of that definition.
[Subsection (2A) inserted by section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(3) In addition to any deductions allowable in terms of this Act, where-
(a) during any year of assessment a learner who holds a qualification to which an NQF level from 1 up to and including 6 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer for a period of less than 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,
there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R40 000.
[Subsection (3) substituted by section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(3A) In addition to any deductions allowable in terms of this Act, where-
(a) during any year of assessment a learner who holds a qualification to which an NQF level from 7 up to and including 10 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer for a period of less than 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,
there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R20 000.
[Subsection (3A) inserted by section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(4) In addition to any deductions allowable in terms of this Act, where-
(a) during any year of assessment a learner who holds a qualification to which an NQF level from 1 up to and including 6 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), to a registered learnership agreement with an employer for a period that equals or exceeds 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,
there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R40 000 multiplied by the number of consecutive 12 month periods within the duration of that agreement.
[Subsection (4) substituted by section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(4A) In addition to any deductions allowable in terms of this Act, where-
(a) during any year of assessment a learner is a party who holds a qualification to which an NQF level from 7 up to and including 10 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), to a registered learnership agreement with an employer for a period that equals or exceeds 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,
there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R20 000 multiplied by the number of consecutive 12 month periods within the duration of that agreement.
[Subsection (4A) inserted by section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(5) Where a learner contemplated in subsection (2), (3) or (4) is a person with a disability (as defined in section 6B(1)) at the time of entering into the learnership agreement, the amounts contemplated in subsection (2), (3) or (4) must be increased by an amount of R20 000.
[Subsection (5) substituted by substituted by section 21 of Act 43 of 2014 and section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(5A) Where a learner contemplated in subsection (2A), (3A) or (4A) is a person with a disability (as defined in section 6B(1)) at the time of entering into the learnership agreement, the amounts contemplated in subsection (2A), (3A) or (4A) must be increased by an amount of R30 000.
[Subsection (5A) inserted by section 30 of Act 15 of 2016 effective on 1 October 2016, applies in respect of learnership agreements entered into on or after that date]
(6) This section does not apply in respect of any registered learnership agreement where-
(a) the learner that is the party to that agreement previously failed to complete any other registered learnership agreement to which the employer or an associated institution in relation to that employer was a party; and
(b) the registered learnership agreement contains the same education and training component as that other registered learnership agreement.
(7) Any SETA with which a learnership agreement has been registered as contemplated in the Skills Development Act, 1998, must submit to the Minister any information relating to that learnership agreement required by the Minister in the form and manner and at the place and time that the Minister prescribes.
(8) In respect of each year of assessment during which an employer is eligible for any deduction contemplated in this section, the employer must submit to the SETA with which the learnership agreement is registered any information relating to that learnership agreement required by the SETA in the form and manner and at the place and time indicated by the SETA.