(1)       For the purposes of this section-

‘acquired company’ means-

(a)     a transferor company or a liquidating company that disposes of assets pursuant to a reorganisation transaction; or

(b)     a company in which equity shares are acquired by another company in terms of an acquisition transaction;

‘acquiring company’ means-

(a)     a transferee company contemplated in the definition of ‘intra-group transaction’ in section 45(1);

(b)     a holding company contemplated in the definition of ‘liquidation distribution’ in section 47(1); or

(c)     a company that acquires an equity share in another company in terms of an acquisition transaction;

‘acquisition transaction’ means any transaction-

(a)     in terms of which an acquiring company acquires an equity share in an acquired company that is a company as contemplated in paragraph (a) or (b) of the definition of “acquisition transaction” in section 24O(1); and

[Paragraph (a) substituted by section 40 of Act 25 of 2015 effective on 1 January 2016]

(b)     as a result of which that acquiring company, as at the end of the day of that transaction, becomes a controlling group company in relation to that acquired company;

[Paragraph (b) substituted by section 40 of Act 25 of 2015 effective on 1 January 2016]

“adjusted taxable income” means taxable income calculated before applying this section and before setting off any balance of assessed loss that has been carried forward from the preceding year of assessment: Provided that the result of the calculation may not be less than zero-

(a)     reduced by-

(i)      any amount of interest received or accrued that forms part of taxable income;

[Subsection (i) substituted by section 42 of Act 23 of 2018 effective on 17 January 2019]

(ii)     any amount included in the income of a person as contemplated in section 9D(2);

(iii)    any amount recovered or recouped in respect of an allowance contemplated in this Act in respect of a capital asset as defined in section 19; and

[Subparagraph (iii) amended by section 38 of Act 43 of 2014 effective on 1 January 2015]

(b)     with the addition of-

(i)      any amount of interest incurred that has been allowed as a deduction from income;

[Subsection (i) substituted by section 42 of Act 23 of 2018 effective on 17 January 2019]

(ii)     any amount allowed as a deduction in terms of this Act in respect of a capital asset as defined in section 19 for purposes other than the determination of any capital gain or capital loss;

[Subparagraph (ii) amended by section 38 of Act 43 of 2014 effective on 1 January 2015]

(iii)    75 per cent of the receipts or accruals derived from the letting of any immovable property; and

[Subparagraph (iii) amended by section 38 of Act 43 of 2014 effective on 1 January 2015]

(iv)    any assessed loss or balance of assessed loss allowed to be set off against income in terms of section 20;

[Subparagraph (iv) added by section 38 of Act 43 of 2014 effective on 1 January 2015]

[Definition of “adjusted taxable income” amended by section 42(1)(a) of Act 23 of 2018 and by section 19(1)(a) of Act 42 of 2024 effective on 1 January, 2025 and applicable in respect of years of assessment commencing on or after that date. Subparagraph (iv) added by section 38(1)(d) of Act 43 of 2014 effective on 1 January, 2015 and applicable in respect of years of assessment commencing on or after that date]

‘average repo rate’ in relation to a year of assessment means the average of all ruling repo rates determined by using the daily repo rates during that year of assessment;

‘interest’ means interest as defined in section 24J;

‘issue’ in relation to a debt, means the creation of a liability to pay or of a right to receive an amount in terms of that debt;

‘reorganisation transaction’ means-

(a)     an intra-group transaction as defined in section 45(1) to which section 45 applies; or

(b)     a liquidation distribution as defined in section 47(1) to which section 47 applies;

‘repo rate’ means the interest rate at which the South African Reserve Bank enters into a repurchase agreement contemplated in section 10(1)(j) of the South African Reserve Bank Act.