(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-

[Words preceding paragraph (a) substituted by section 42 of Act 23 of 2018 effective on 17 January 2019]

(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]

‘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.