Category: PRELIMINARY (ITA)

“Dividend” definition of section 1 of ITA

Posted on by admin_kmos

“dividend” means any amount, other than a dividend consisting of a distribution of an asset in specie declared and paid as contemplated in section 31(3), transferred or applied by a company that is a resident for the benefit or on behalf of any person in respect of any share in that company, whether that amount is transferred or applied-

[Words preceding paragraph (a) substituted by section 1 of Act 23 of 2018 effective on 1 January 2019, applies in respect of years of assessment commencing on or after that date]

(a)     by way of a distribution made by; or

(b)     as consideration for the acquisition of any share in,

that company, but does not include any amount so transferred or applied to the extent that the amount so transferred or applied-

(i)      results in a reduction of contributed tax capital of the company;

 

(ii)     constitutes shares in the company;   or  

 

(iii)    constitutes an acquisition by the company of its own securities by way of a general repurchase of securities as contemplated in subparagraph  (b) of paragraph  5.67(B) of section 5 of the JSE Limited Listings Requirements, where that acquisition complies with any applicable requirements prescribed by paragraph s 5.68 and 5.72 to 5.81 of section 5 of the JSE Limited Listings Requirements or a general repurchase of securities as contemplated in the listings requirements of any other exchange, licensed under the Financial Markets Act, that are substantially the same as the requirements prescribed by the JSE Limited Listings Requirements, where that acquisition complies with the applicable requirements of that exchange;

[Paragraph (iii) substituted by section 2(1)(b) of Act 17 of 2017 and by section 2(1)(a) of Act 34 of 2019]

“Living annuity” definition of section 1 of ITA

Posted on by admin_kmos

“living annuity” means a right of a member or former member of a pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund, or his or her dependant or nominee, or any subsequent nominee, to an annuity purchased from a person or provided by any fund on or after the retirement date of that member or former member in respect of which-

(a)     the value of the annuity is determined solely by reference to the value of assets which are specified in the annuity agreement and are held for purposes of providing the annuity;

(b)     the amount of the annuity is determined in accordance with a method or formula prescribed by the Minister by notice in the Gazette;

(c)     the full remaining value of the assets contemplated in paragraph (a) may be paid as a lump sum when the value of those assets become at any timeless than an amount prescribed by the Minister by notice in the Gazette;

(d)     the amount of the annuity is not guaranteed by that person or fund;

(e)     on the death of the member or former member, the value of the assets referred to in paragraph (a) may be paid to a nominee of the member or former member as an annuity or lump sum or as an annuity and a lump sum, or, in the absence of a nominee, to the deceased’s estate as a lump sum;

[Paragraph (e) substituted by section 4(1)(i) of Act 60 of 2008 and by section 7(1)(y) of Act 24 of 2011 and amended by section 2(1)(e) of Act 23 of 2020 effective on 1 March, 2021]

(eA)  in anticipation of the termination of a trust, the value of the assets referred to in paragraph (a) must be paid to the trust as a lump sum pursuant to that termination; and

[Paragraph (eA) inserted by section 2(1)(f) of Act 23 of 2020 effective on 1 March, 2021]

(f)      further requirements regarding the annuity may be prescribed by the Minister by notice in the Gazette;

[Definition of “living annuity” inserted by section 2(1)(o) of Act 3 of 2008 and amended by section 4(1)(g) of Act 60 of 2008 and by section 1(1)(e) of Act 20 of 2022]

“Foreign partnership” definition of section 1 of ITA

Posted on by admin_kmos

‘foreign partnership’, in respect of any year of assessment, means any partnership, association, body of persons or entity formed or established under the laws of any country other than the Republic if-

(a)     for the purposes of the laws relating to tax on income of the country in which that partnership, association, body of persons or entity is formed or established-

(i)      each member of the partnership, association, body of persons or entity is required to take into account the member’s interest in any amount received by or accrued to that partnership, association, body of persons or entity when that amount is received by or accrued to the partnership, association, body of persons or entity; and

 

(ii)     the partnership, association, body of persons or entity is not liable for or subject to any tax on income, other than a tax levied by a municipality, local authority or a comparable authority, in that country; or

[Subparagraph (ii) substituted by section 3 of Act 25 of 2015 effective on 31 Deccember 2015]

(b)     where the country in which that partnership, association, body of persons or entity is formed or established does not have any applicable laws relating to tax on income-

(i)     any amount-

(aa)    that is received by or accrues to; or

(bb)    of expenditure that is incurred by,

the partnership, association, body of persons or entity is allocated concurrently with the receipt, accrual or incurral to the members of that partnership, association, body of persons or entity in terms of an agreement between those members; and

(ii)     no amount distributed to a member of a partnership, association, body of persons or entity may exceed the allocation contemplated in subparagraph (i) after taking into account any prior distributions made by the partnership, association, body of persons or entity;