(1)     For the purposes of this section-

“controlled foreign company” means-

(a)     any foreign company where more than 50 per cent of the total participation rights in that foreign company are directly or indirectly held, or more than 50 per cent of the voting rights in that foreign company are directly or indirectly exercisable, by one or more persons that are residents other than persons that are headquarter companies: Provided that-

(i)     no regard must be had to any voting rights in any foreign company-

(aa) which is a listed company; or

(bb) if the voting rights in that foreign company are exercisable indirectly through a listed company;

(ii)    any voting rights in a foreign company which can be exercised directly by any other controlled foreign company in which that resident (together with any connected person in relation to that resident) can directly or indirectly exercise more than 50 per cent of the voting rights are deemed for purposes of this definition to be exercisable directly by that resident; and

(iii)   a person is deemed not to be a resident for purposes of determining whether residents directly or indirectly hold more than 50 per cent of the participation rights or voting rights in a foreign company, if-

(aa) in the case of a listed company or a foreign company the participation rights of which are held by that person indirectly through a listed company, that person holds less than five per cent of the participation rights of that listed company; or

(bb) in the case of a scheme or arrangement contemplated in paragraph (e)(ii) of the definition of “company” in section 1 or a foreign company the participation rights of which are held and the voting rights of which may be exercised by that person indirectly through such a scheme or arrangement, that person-

(A)    holds less than five per cent of the participation rights of that scheme or arrangement; and

(B)    may not exercise at least five per cent of the voting rights in that scheme or arrangement,

unless more than 50 per cent of the participation rights or voting rights of that foreign company or other foreign company are held by persons who are connected persons in relation to each other; or

[Paragraph (a) amended by section 10(1)(a) of Act 34 of 2019]

(b)     any foreign company where the financial results of that foreign company are reflected in the consolidated financial statements, as contemplated in IFRS 10, of any company that is a resident, other than a headquarter company;

[Paragraph (b) substituted by section 18(a) of Act 23 of 2018 and by section 10(1)(b) of Act 34 of 2019]

[Definition of “controlled foreign company” substituted by section 14 of Act 31 of 2005, amended by section 15 of Act 35 of 2007 and section 16 of Act 7 of 2010 and substituted by section 15 of Act 17 of 2017 effective on 1 January 2018 and applies in respect of any year of assessment commencing on or after that date]