Category: Section 23 (ITA) – Deductions not allowed in determination of taxable income

Section 23

 

  1. Subparagraph (b)(i) substituted by section 15 of Act 21 of 1994.

 

  1. Subparagraph (b)(ii) substituted by section 15 of Act 21 of 1994.

 

  1. Paragraph (b) amended by section 23 of Act 129 of 1991 and section 18 of Act 113 of 1993.

 

  1. Paragraph (d) substituted by section 20 of Act 121 of 1984, section 20 of Act 141 of 1992, section 28 of Act 30 of 2000, section 13 of Act 16 of 2004 and section 271 of Act 28 of 2011 effective on 1 October 2012.

 

  1. Paragraph (g) substituted by section 20 of Act 141 of 1992.

 

  1. Paragraph (i) deleted by section 18 of Act 65 of 1973, added by section 20 of Act 121 of 1984, amended by section 18 of Act 113 of 1993 and section 15 of Act 21 of 1994, deleted by section 21 of Act 30 of 2002 and inserted by section 20 of Act 8 of 2007 and substituted by section 37 of Act 60 of 2008 effective on 1 March 2009.

 

  1. Paragraph (j) added by section 20 of Act 141 of 1992 and deleted by section 17 of Act 20 of 2006.

 

  1. Paragraph (k) added by section 28 of Act 30 of 2000 and amended by section 17 of Act 20 of 2006 and substituted by section 37 of Act 60 of 2008 effective on 1 March 2009.

 

  1. Paragraph (l) added by section 28 of Act 30 of 2000.

 

  1. Subparagraph (m)(ii) amended by section 28 of Act 31 of 2005 effective on 1 March 2005.

 

  1. Subparagraph (iiA) inserted by section 37 of Act 60 of 2008.

 

  1. Subparagraph (m)(iiii) amended by section 38 of Act 45 of 2003 and substituted by section 28 of Act 31 of 2005 effective on 1 March 2002.

 

  1. Subparagraph (m)(iv) added by section 28 of Act 31 of 2005 effective on 1 March 2005.

 

  1. Paragraph (m) added by section 21 of Act 30 of 2002.

 

  1. Subparagraph (n)(i) substituted by section 42 of Act 22 of 2012 effective on 1 January 2013.

 

  1. Paragraph (n) added by section 38 of Act 45 of 2003, amended by section 28 of Act 31 of 2005 and substituted by section 17 of Act 20 of 2006.

 

  1. Paragraph (o) added by section 28 of Act 31 of 2005 effective on 1 January 2006 and amended by section 47 of Act 24 of 2011 effective on 1 March 2012.

 

  1. Paragraph (p) added by section 41 of Act 7 of 2010 effective on 1 January 2011, (addition repealed by section 162 of Act 24 of 2011 effective on 1 January 2011) and added by section 47 of Act 24 of 2011 effective on 1 March 2012.

 

  1. Paragraph (q) added by section 41 of Act 7 of 2010 effective on 1 January 2011, (addition repealed by section 162 of Act 24 of 2011 effective on 1 January 2011), and added by section 47 of Act 24 of 2011 effective on 1 March 2012 insofar as it applies to any person that is a natural person, deceased estate, insolvent estate or special trust, and effective on 1 April 2012 insofar as it applies to any person that is a person other than a natural person, deceased estate, insolvent estate or special trust.

Section 23(k) of ITA

Posted on by admin_kmos

(k)     any expense incurred by-

 

(i)      a labour broker as defined in the Fourth Schedule, other than a labour broker in respect of which a certificate of exemption has been issued in terms of paragraph 2(5) of the said Schedule; or

 

(ii)     a personal service provider as defined in the said Schedule,

 

other than any expense which constitutes an amount paid or payable to any employee of such labour broker or personal service provider for services rendered by such employee, which is or will be taken into account in the determination of the taxable income of such employee and, in the case of such personal service provider, any expense, deduction or contribution contemplated in paragraphs (c), (i), (l), (nA) or (nB) of section 11, expenses in respect of premises, finance charges, insurance, repairs and fuel and maintenance in respect of assets, if such premises or assets are used wholly and exclusively for purposes of trade;

Section 23(m) of ITA

Posted on by admin_kmos

(m)    subject to paragraph (k), an expenditure, loss or allowance, contemplated in section 11, which relates to any employment of, or office held by, any person (other than an agent or representative whose remuneration is normally derived mainly in the form of commissions based on his or her sales or the turnover attributable to him or her) in respect of which he or she derives any remuneration, as defined in paragraph 1 of the Fourth Schedule, other than –

(i)      any contributions to a pension fund, provident fund or retirement annuity fund as may be deducted from the income of that person in terms of section 11F;

[Subparagraph (i) substituted by section 56 of Act 31 of 2013 and section 35 of Act 17 of 2017 effective on 1 March 2016]

 

(ii)     any allowance or expense which may be deducted from the income of that person in terms of section 11(c), (e), (i) or (j);

 

(iiA)  any deduction which is allowable under section 11(nA) or (nB);

 

(iii)    any deduction which is allowable under section 11(a) in respect of any premium paid by that person in terms of an insurance policy, to the extent that –

 

(aa)   it covers that person against the loss of income as a result of illness, injury, disability or unemployment; and

 

(bb)   the amounts payable in terms of that policy as contemplated in item (aa) constitutes or will constitute income as defined; and

(iv)    any deduction which is allowable under section 11(a) or (d) in respect of any rent of, cost of repairs of or expenses in connection with any dwelling house or domestic premises, to the extent that the deduction is not prohibited under paragraph (b);

Section 23(n) of ITA

Posted on by admin_kmos

(n)     any deduction or allowance in respect of any asset or expenditure to the extent that amount –

 

(i)      is granted or paid to the taxpayer and is exempt from tax in terms of section 10(1)(yA); and

 

(ii)     is so granted or paid for purposes of the acquisition of that asset or funding of that expenditure: Provided that the provisions of this paragraph shall not apply if the grant or payment is in respect of programmes or schemes that the Minister has identified by notice in the Gazette for purposes of this paragraph;

Section 23(o) of ITA

Posted on by admin_kmos

(o)     any expenditure incurred –

(i)      where the payment of that expenditure or the agreement or offer to make that payment constitutes an activity contemplated in Chapter 2 of the Prevention and Combating of Corrupt Activities Act. 2004 (Act No. 12 of 2004);

[Subparagraph (i) amended by section 39 of Act 23 of 2018 effective on 1 April 2019, applies in respect of years of assessment commencing on or after that date]

(ii)     which constitutes a fine charged or penalty imposed as a result of an unlawful activity carried out in the Republic or in any other country if that activity would be unlawful had it been carried out in the Republic; or

[Subparagraph (ii) amended by section 39 of Act 23 of 2018 effective on 1 April 2019 and applies in respect of years of assessment commencing on or after that date]

(iii)     which constitutes fruitless and wasteful expenditure as defined in section 1 of the Public Finance Management Act and determined in accordance with that Act;

[Subparagraph (iii) added by section 39(1) of Act 23 of 2018 and substituted by section 11 of Act 20 of 2022]

[Paragraph (o) added by section 28(1)(e) of Act 31 of 2005 and amended by section 47(1)(a) of Act 24 of 2011 effective on 1 March, 2012 and applicable in respect of policies ceded on or after that date]

Section 23(p) of ITA

Posted on by admin_kmos

(p)      the value in respect of any cession of a policy of insurance ceded by a taxpayer to-

 

(i)      any-

 

(aa)    employee (or former employee);

 

(bb)   director (or former director); or

 

(cc)    dependant or nominee of the employee (or former employee) or director (or former director),

 

of the taxpayer; or

 

(ii)     any pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund for the benefit of any-

 

(aa)    employee (or former employee);

 

(bb)   director (or former director); or

 

(cc)    dependant or nominee of the employee (or former employee) or director (or former director),

 

of the taxpayer;

Section 23(r) of ITA

Posted on by admin_kmos

(r)      any deduction in respect of any premium paid by a person in terms of an insurance policy if that insurance policy covers that person against illness, injury, disability, unemployment or death of that person.

[Paragraph (r) added by section 56 of Act 31 of 2013 effective on 1 March 2015 and substituted by section 33 of Act 43 of 2014 effective on 1 March 2015]