Category: Section 13bis (ITA) – Deductions in respect of buidlings used by hotel keepers

Section 13bis

 

  1. Paragraph (1)(a) deleted by section 46 of Act 31 of 2013 effective on 1 January 2014.

 

  1. Paragraph (1)(b) deleted by section 46 of Act 31 of 2013 effective on 1 January 2014.

 

  1. Paragraph (1)(c) amended by section 46 of Act 31 of 2013 effective on 1 January 2014.

 

  1. Paragraph (1)(d) amended by section 13 of Act 113 of 1993.

 

  1. Paragraph (1)(e) substituted by section 13 of Act 113 of 1993 and section 12 of Act 21 of 1994.

 

  1. Subsection (1) amended by section 13 of Act 90 of 1988 and section 13 of Act 113 of 1993.

 

  1. Subsection (1A) inserted by section 31 of Act 7 of 2010 effective on 2 November 2010.

 

  1. Subsection (3) amended by section 18 of Act 55 of 1966, substituted by section 14 of Act 95 of 1967 and amended by section 46 of Act 97 of 1986.

 

  1. Subsection (3A) inserted by section 21 of Act 59 of 2000.

 

  1. Subsection (4) amended by section 46 of Act 97 of 1986.

 

  1. Subsection (5) substituted by section 21 of Act 59 of 2000.

 

  1. Paragraph (6)(a) substituted by section 3 of Act 4 of 2008 effective on 3 July 2008.

 

  1. Subsection (7) substituted by section 18 of Act 55 of 1966 and deleted by section 12 of Act 21 of 1994.

 

  1. Subsection (7A) inserted by section 18 of Act 55 of 1966 and deleted by section 12 of Act 21 of 1994.

 

  1. Subsection (7B) inserted by section 18 of Act 55 of 1966 and deleted by section 12 of Act 21 of 1994.

 

  1. Subsection (8) substituted by section 18 of Act 55 of 1966 and deleted by section 12 of Act 21 of 1994.

 

  1. Subsection (9) added by section 14 of Act 88 of 1971, amended by section 14 of Act 69 of 1975, deleted by section 13 of Act 94 of 1983, added by section 13 of Act 90 of 1988 and amended by section 12 of Act 21 of 1994.

 

  1. Subsection (10) added by section 14 of Act 88 of 1971, amended by section 14 of Act 69 of 1975 and deleted by section 13 of Act 94 of 1983.

 

  1. Subsection (11) added by section 14 of Act 88 of 1971, amended by section 14 of Act 69 of 1975 and deleted by section 13 of Act 94 of 1983.

 

  1. Section 13bis inserted by section 15 of Act 88 of 1965.

Section 13bis (ITA) – Deductions in respect of buildings used by hotel keepers

Posted on by admin_kmos

13bis.     Deductions in respect of buildings used by hotel keepers

(1)     Notwithstanding anything to the contrary contained in paragraph (ii) of the proviso to paragraph (e) of section 11, there shall be allowed to be deducted from the income of any taxpayer for any year of assessment ending on or after the first day of January, 1964, an allowance equal to two per cent of the cost (after the set–off of any amount as provided in subsection (6)) to the taxpayer –

(a)     ……….


(b)     ……….


(c)     of any building the erection of which was commenced by the taxpayer on or after the first day of January, 1964, and of any improvements (other than repairs) thereto commenced not later than the thirtieth day of June, 1965, if such building –


(i)      was brought into use not later than the thirtieth day of June, 1965; and


(ii)     was during the year of assessment wholly or mainly used by the taxpayer for the purpose of carrying on therein his trade of hotel keeper or was during such year let by the taxpayer and wholly or mainly used by the lessee for the purpose of carrying on therein the lessee’s trade of hotel keeper;


(d)     of such portion –


(i)      of any building (other than a building in respect of the cost of which an allowance under the preceding provisions of this subsection is or was deductible from the income of the taxpayer for the current or any previous year of assessment) the erection of which was commenced by the taxpayer on or after the first day of January, 1964; or


(ii)     of any improvements (other than repairs) to any building referred to in this paragraph, if such improvements were commenced on or after the first day of January, 1964; or

[Subparagraph (ii) substituted by section 31 of Act 25 of 2015 effective on 1 January 2016]


(iii)    of any improvements (other than repairs) to any building referred to in paragraph (c), if such improvements were commenced on or after the first day of July, 1965,


as –


(aa)   was during the year of assessment used by the taxpayer for the purpose of carrying on therein his trade of hotel keeper; or


(bb)   was during such year let by the taxpayer and used by the lessee for the purpose of carrying on therein the lessee’s trade of hotel keeper; or


(e)     of such portion of any building improvements (other than repairs and other than improvements in respect of the cost of which, or of any portion thereof, an allowance under the preceding provisions of this subsection is or was deductible from the income of the taxpayer for the current or any previous year of assessment) commenced on or after 1 January 1964, as was during the year of assessment in question used by the taxpayer for the purposes of the taxpayer’s trade of hotel keeper or was during the year of assessment in question let by the taxpayer and used by the lessee for the purposes of the lessee’s trade of hotel keeper:

[Paragraph (e) substituted by section 13 of Act 113 of 1993, section 12 of Act 21 of 1994 and section 33 of Act 23 of 2018 effective on 17 January 2019]


Provided that no allowance shall be made under this subsection in respect of such portion of the cost of any building the erection of which was commenced on or after the first day of July, 1961, or any improvements effected thereto, as has been taken into account in the calculation of any allowance to the taxpayer under paragraph (g) of section eleven, whether in the current or any previous year of assessment: Provided further that in the case of any such building the erection of which has or is commenced on or after 4 June 1988 and any such improvements which have or are commenced on or after that date the allowance under this subsection shall be increased to 5 per cent of the cost (after the set­off of any amount as provided in subsection (6)) to the taxpayer of such building or improvements: Provided further that to the extent to which any portion of any such improvements which have or are commenced on or after 17 March 1993 does not extend the existing exterior framework of the building, the allowance under this subsection shall be increased to 20 percent of the cost of such portion.

[Sub­section (1) amended by section 13(a) of Act 90 of 1988, by section 13(1)(c) of Act 13 of 1993 and by section 21 of Act 34 of 2019]

(1A)  ……….

[Subsection (1A) inserted by section 31 of Act 7 of 2010 and deleted by section 33 of Act 23 of 2018 effective on 17 January 2019]

(2)     . . . . . .

[Subsection (2) deleted by section 14 of Act 42 of 2024]

(3)     . . . . . .

[Subsection (3) amended by section 18(1)(a) of Act 55 of 1966, substituted by section 14(1) of Act 95 of 1967, amended by section 46 of Act 97 of 1986 and by section 33(c) of Act 23 of 2018(English only) and deleted by section 14 of Act 42 of 2024]

(3A)  Where any building in respect of which any deduction of an allowance is claimed in terms of this section was during any previous financial year or years used by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year or years, any deduction which could have been allowed during such previous year or years in terms of this section shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.

(4)     . . . . . .

[Subsection (4) amended by section 46 of Act 97 of 1986 and deleted by section 14 of Act 42 of 2024]

(5)     The deductions which may be allowed or deemed to have been allowed in terms of this section and any other provision of this Act in respect of the cost of any building or improvement shall not in the aggregate exceed the amount of such cost.

[Subsection (5) substituted by section 21 of Act 59 of 2000 and section 31 of Act 25 of 2015 effective on 1 January 2016]

(6)

(a)     If in any year of assessment there falls to be included in a taxpayer’s income in terms of paragraph (a) of subsection (4) of section 8 an amount which has been recovered or recouped in respect of any allowance made under the preceding provisions of this section or the provisions of subsection (1) of section 13, as applied by subsection (4) of that section, or the corresponding provisions of any previous Income Tax Act, in respect of any building or portion thereof or any improvements or portion thereof, so much of the amount so recovered or recouped as is set off against the cost of a further building as hereinafter provided shall, notwithstanding the provisions of the said paragraph, at the option of the taxpayer and provided the taxpayer erects within twelve months or such further period as the Commissioner may allow from the date on which the event giving rise to the recovery or recoupment occurred, any other building in respect of the cost of which an allowance is made under the preceding provisions of this section, not be included in the taxpayer’s income for that year of assessment, but shall be set off against so much of the cost to the taxpayer of such further building erected by the taxpayer as remains after the deduction of any portion of that cost in respect of which an allowance has been granted to the taxpayer under paragraph (g) of section eleven, whether in the current or any previous year of assessment.


(b)     Where any allowance has been made under the provisions of subsection (1) of section 13, as applied by subsection (4) of that section, in respect of the cost of any building, any amount which has in terms of subsection (3) of that section been set off against such cost, shall be set off against such cost in the calculation of any allowance made in respect thereof under the preceding provisions of this section.

(7)     ……….

(8)     ……….

(9)     . . . . . .

[Subsection (9) added by section 14(1) of Act 88 of 1971, amended by section 14(a) of Act 69 of 1975, deleted by section 13 of Act 94 of 1983, added by section 13(b) of Act 90 of 1988, amended by section 12(c) of Act 21 of 1994 and deleted by section 14 of Act 42 of 2024]