“capital gain” means an amount determined in terms of paragraph 3 of the Eighth Schedule;
Category: PRELIMINARY (ITA)
“Child” definition of section 1 of ITA
“child”, in relation to any person, includes any person adopted by him or her –
(a) under the law of the Republic; or
(b) under the law of any country other than the Republic, provided the adopted person is under such law accorded the status of a legitimate child of the adoptive parent and the adoption was made at a time when the adoptive parent was ordinarily resident in such country;
“Domestic treasury management company” definition of section 1 of ITA
“domestic treasury management company” means a company-
(a) that is incorporated or deemed to be incorporated—
(i) by or under any law in force in the Republic and is not subject to exchange control restrictions by virtue of being registered with the financial surveillance department of the South African Reserve Bank; or
(ii) by or under the law of any country other than the Republic and is not subject to exchange control restrictions by virtue of being registered before 1 January 2019 with the financial surveillance department of the South African Reserve Bank; and
(b) that has its place of effective management in the Republic;
[Definition of “domestic treasury management company” inserted by section 4(1)(o) of Act 31 of 2013, amended by section 2(1)(c) of Act 17 of 2017 and substituted by section 2(1)(b) of Act 34 of 2019]
“Equity share” definition of section 1 of ITA
“equity share” means any share in a company, excluding any share that, neither as respects dividends nor as respects returns of capital, carries any right to participate beyond a specified amount in a distribution;
“Companies Act” definition of section 1 of ITA
“Companies Act” means the Companies Act, 2008 (Act No. 71 of 2008);
“Executor” definition of section 1 of ITA
“executor” means any person to whom letters of administration have been granted by a Master or an Assistant Master of the High Court appointed under the Administration of Estates Act, 1965 (Act No. 66 of 1965), in respect of the estate of a deceased person under any law relating to the administration of estates, and includes a person acting or authorized to act under letters of administration granted outside the Republic but signed and sealed by such a Master or Assistant Master for use within the Republic and, in any case where the estate is not required to be administered under the supervision of such a Master or Assistant Master, the person administering the estate;
“Company” definition of section 1 of ITA
“company” includes –
(a) any association, corporation or company (other than a close corporation) incorporated or deemed to be incorporated by or under any law in force or previously in force in the Republic or in any part thereof, or any body corporate formed or established or deemed to be formed or established by or under any such law; or
(b) any association, corporation or company incorporated under the law of any country other than the Republic or any body corporate formed or established under such law; or
(c) any co-operative; or
(d) any association (not being an association referred to in paragraph (a) or (f) formed in the Republic to serve a specified purpose, beneficial to the public or a section of the public; or
(e) any –
(i) ……….
(ii) portfolio comprised in any investment scheme carried on outside the Republic that is comparable to a portfolio of a collective investment scheme in participation bonds or a portfolio of a collective investment scheme in securities in pursuance of any arrangement in terms of which members of the public (as defined in section 1 of the Collective Investment Schemes Control Act) are invited or permitted to contribute to and hold participatory interests in that portfolio through shares, units or any other form of participatory interest; or
(iii) portfolio of a collective investment scheme in property that qualifies as a REIT as defined in the listing requirements of an exchange, as defined in section 1 of the Financial Markets Act and licensed under section 9 of that Act, where those listing requirements have been approved in consultation with the Director-General of the National Treasury and published by the appropriate authority, as contemplated in section 1 of the Financial Markets Act, in terms of section 11 of that Act or by the Financial Sector Conduct Authority; or
[Subparagraph (iii) added by section 2(1)(a) of Act 22 of 2012 and substituted by section 4(1)(f) of Act 31 of 2013, by section 1(1)(a) of Act 43 of 2014, by section 3(1)(b) of Act 25 of 2015, by section 1(1)(a) of Act 23 of 2018 and by section 4(1)(a) of Act 20 of 2021]
(f) a close corporation,
but does not include a foreign partnership;
“Financial instrument” definition of section 1 of ITA
“financial instrument” includes –
(a) a loan, advance, debt, bond, debenture, bill, share, promissory note, banker’s acceptance, negotiable certificate of deposit, deposit with a financial institution, a participatory interest in a portfolio of a collective investment scheme, or a similar instrument;
(b) any repurchase or resale agreement, forward purchase arrangement, forward sale arrangement, futures contract, option contract or swap contract;
(c) any other contractual right or obligation the value of which is determined directly or indirectly with reference to –
(i) a debt security or equity;
(ii) any commodity as quoted on an exchange; or
(iii) a rate index or a specified index;
(d) any interest-bearing arrangement;
[Paragraph (d) amended by section 1 of Act 23 of 2018 effective on 17 January 2019]
(e) any financial arrangement based on or determined with reference to the time value of money or cash flow or the exchange or transfer of an asset; and
[Paragraph (e) amended by section 1 of Act 23 of 2018 effective on 17 January 2019]
(f) any crypto asset;
[Definition of “financial instrument” inserted by section 6(1)(h) of Act 74 of 2002 effective on the date of promulgation of that Act, 13 December, 2002. Paragraph (f) added by section 1(1)(c) of Act 23 of 2018 and substituted by section 2(1)(c) of Act 23 of 2020]
“Financial year” definition of section 1 of ITA
“financial year”, in relation to any company, means –
(a) the period, whether of 12 months or not, commencing upon the date of incorporation or creation of such company and ending upon the last day of February immediately succeeding such date or upon such other date as the Commissioner having regard to the circumstances of the case may approve; or
(b) any period subsequent to the period referred to in paragraph (a), whether of 12 months or not, commencing immediately after the last day of the immediately preceding financial year of such company and ending upon the first anniversary of such last day or upon such other date as the Commissioner having regard to the circumstances of the case may approve;
“Contributed tax capital” definition of section 1 of ITA
“contributed tax capital”, in relation to a class of shares in a company, means-
[Words preceding paragraph (a) substituted by section 1 of Act 43 of 2014 effective on 20 January 2015]
(a) in relation to a class of shares issued by a company, in the case of a foreign company that becomes a resident on or after 1 January 2011, an amount equal to the sum of-
[Words preceding subparagraph (i) substituted by section 4 of Act 31 of 2013 and section 1 of Act 43 of 2014 effective on 20 January 2015]
(i) the market value of all the shares in that company of that class immediately before the date on which that company becomes a reside: Provided that the market value must be reduced by an amount equal to the difference between-
(aa) the market value of the shares held by that foreign company in; and
(bb) an amount equal to the percentage of shares held by that foreign company in a resident company, of the aggregate contributed tax capital in respect of each class of shares of,
each resident company in which that foreign company directly holds at least 50 per cent of the equity shares or voting rights immediately before the date on which that foreign company becomes a resident;
[Subparagraph (i) amended by section 1(1)(d) of Act 43 of 2014 and by section 1(1)(a) of Act 17 of 2023 with effect from 1 January 2024 and applicable in respect of any company that becomes a resident on or after that date]
(ii) the consideration received by or accrued to that company for the issue of shares of that class on or after the date on which that company becomes a resident; and
[Subparagraph (ii) amended by section 1 of Act 43 of 2014 effective on 20 January 2015]
(iii) if the shares of that class include or consist of shares that were converted from another class of shares of that company to that class of shares-
(aa) any consideration received by or accrued to that company in respect of that conversion; and
(bb) the amount contemplated in subparagraph (cc) that was determined in respect of shares of the other class of shares that were so converted,
[Subparagraph (iii) added by section 1 of Act 43 of 2014 effective on 20 January 2015]
reduced by so much of that amount as –
(aa) the company has transferred on or after the date on which the company becomes a resident for the benefit of any person holding a share in that company of that class in respect of that share;
[Subparagraph (aa) substituted by section 1 of Act 43 of 2014 effective on 20 January 2015]
(bb) has by the date of the transfer been determined by the directors of the company or by some other person or body of persons with comparable authority to be an amount so transferred; and
[Subparagraph (bb) substituted by section 1 of Act 43 of 2014 effective on 20 January 2015]
(cc) in the case of a convertible class of shares some of the shares of which have been converted to another class of shares, so much of the amount contemplated in this paragraph in respect of that convertible class of shares immediately prior to that conversion as bears to that amount the same ratio as the number of shares so converted bears to the total number of that convertible class of shares prior to that conversion; or
[Subparagraph (cc) added by section 1 of Act 43 of 2014 effective on 20 January 2015]
(b) in relation to a class of shares issued by a company, in the case of any other company, an amount equal to the sum of-
[Words preceding subparagraph (i) substituted by section 1 of Act 43 of 2014 effective on 20 January 2015]
(i) the stated capital or share capital and share premium of that company immediately before 1 January 2011 in relation to shares in that company of that class issued by that company before that date, less so much of that stated capital or share capital and share premium as would have constituted a dividend, as defined before that date, had that stated capital or share capital and share premium been distributed by that company immediately before that date;
[Subparagraph (i) amended by section 1 of Act 43 of 2014 effective on 20 January 2015]
(ii) the consideration received by or accrued to that company for the issue of shares of that class on or after 1 January 2011; and
[Subparagraph (ii) amended by section 1 of Act 43 of 2014 effective on 20 January 2015]
(iii) if the shares of that class include or consist of shares that were converted from another class of shares of that company to that class of shares-
(aa) any consideration received by or accrued to that company in respect of that conversion; and
(bb) the amount contemplated in subparagraph (cc) that was determined in respect of shares of the other class of shares that were so converted,
[Subparagraph (iii) added by section 1 of Act 43 of 2014 effective on 20 January 2015]
reduced by so much of that amount as –
(aa) the company has transferred on or after 1 January 2011 for the benefit of any person holding a share in that company of that class in respect of that share;
[Subparagraph (aa) substituted by section 1 of Act 43 of 2014 effective on 20 January 2015]
(bb) has by the date of the transfer been determined by the directors of the company or by some other person or body of persons with comparable authority to be an amount so transferred; and
[Subparagraph (bb) substituted by section 1 of Act 43 of 2014 effective on 20 January 2015]
(cc) in the case of a convertible class of shares some of the shares of which have been converted to another class of shares, so much of the amount contemplated in this paragraph in respect of that convertible class of shares immediately prior to that conversion as bears to that amount the same ratio as the number of shares so converted bears to the total number of that convertible class of shares prior to that conversion:
[Subparagraph (cc) added by section 1 of Act 43 of 2014 effective on 20 January 2015]
Provided that the amount transferred by a company as contemplated in paragraph (a) or (b) for the benefit of a person holding shares of any class of shares of that company must not exceed an amount that bears to the total of the amount of contributed tax capital attributable to that class of shares immediately before the transfer the same ratio as the number of shares of that class held by that person bears to the total number of shares of that class: Provided further that an amount transferred by a company as contemplated in paragraph (a) or (b) must comprise a transfer of contributed tax capital only where-
(i) the shares in a class of shares, in respect of which—
(aa) a distribution is made; or
(bb) consideration for the acquisition, cancellation or redemption is paid or payable by that company,
are each transferred an equal amount of contributed tax capital in respect of that class of shares; and
(ii) the amount of that transfer per share does not exceed the total amount of contributed tax capital in respect of that class of shares divided by the total number of issued shares within that class of shares;
[Definition of “contributed tax capital” inserted by section 4(1)(b) of Act 60 of 2008, amended by section 7(1)(g) of Act 17 of 2009, substituted by section 6(1)(f) of Act 7 of 2010 and by section 7(1)(b) and (c) of Act 24 of 2011 and amended by section 1(1)(b) of Act 43 of 2014 and by section 4(1)(c) of Act 20 of 2021 (as substituted by section 41(1) of Act 20 of 2022, deemed to have come into operation on 19 January 2022) effective on 1 January 2023]