(e) save as provided in paragraph 12(2) of the First Schedule, such sum as the Commissioner may think just and reasonable as representing the amount by which the value of any machinery, plant, implements, utensils and articles (other than machinery, plant, implements, utensils and articles in respect of which a deduction may be granted under section 12B, 12BA, 12C, 12DA, 12E(1), 12U or 37B) owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act and used by the taxpayer for the purpose of his or her trade has been diminished by reason of wear and tear or depreciation during the year of assessment: Provided that-
(i) ……….
(iA) no allowance may be made in respect of any machinery, plant, implement, utensil or article the ownership of which is retained by the taxpayer as a seller in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act;
(ii) in no case shall any allowance be made for the depreciation of buildings or other structures or works of a permanent nature;
(iiA) where any machinery, implement, utensil or article qualifying for an allowance under this paragraph is mounted on or affixed to any concrete or other foundation or supporting structure and –
(aa) the foundation or supporting structure is designed for such machinery, implement, utensil or article and constructed in such manner that it is or should be regarded as being integrated with the machinery, implement, utensil or article; and
(bb) the useful life of the foundation or supporting structure is or will be limited to the useful life of the machinery, implement, utensil or article mounted thereon or affixed thereto,
the said foundation or supporting structure shall for the purposes of this paragraph not be deemed to be a structure or work of a permanent nature but shall for the purposes of this Act be deemed to be a part of the machinery, implement, utensil or article mounted thereon or affixed thereto;
(iii) ……….
[Subparagraph (iii) substituted by section 12 of Act 55 of 66 and section 10 of Act 21 of 1994 and deleted by section 18 of Act 25 of 2015 effective on 8 January 2016]
(iiiA) no allowance shall be made under this paragraph in respect of any machinery, implement, utensil or article of which the cost has been allowed as a deduction from the taxpayer’s income under the provisions of section 24D;
(iv) ……….
(v) the value of any machinery, implements, utensils or articles used by the taxpayer for the purposes of his trade shall be increased by the amount of any expenditure (other than expenditure referred to in paragraph (a)) which is incurred by the taxpayer in moving such machinery, implements, utensils or articles from one location to another;
[Subparagraph (v) substituted by section 18 of Act 25 of 2015 effective on 8 January 2016]
(vi) ……….
(vii) where the value of any such machinery, implements, utensils or articles acquired by the taxpayer on or after 15 March 1984 is for the purposes of this paragraph to be determined having regard to the cost of such machinery, implements, utensils or articles, such cost shall be deemed to be the cost which the taxpayer would, if such taxpayer had acquired such machinery, implements, utensils or articles under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition of such machinery, implements, utensils or articles was in fact concluded, have incurred in respect of the direct cost of the acquisition of such machinery, implements, utensils or articles, including the direct cost of the installation or erection thereof;
[Paragraph (vii) added by section 11(1)(c) of Act 121 of 1984, amended by section 19(1)(c) of Act 7 of 2010 and substituted by section 18(1)(c) of Act 25 of 2015 and by section 8(1)(a) of Act 20 of 2022 deemed effective on 29 July, 2022 and applicable in respect of years of assessment ending on or after that date]
(viii) ……….
(ix) where any such machinery, plant, implement, utensil or article was used by the taxpayer during any previous year of assessment or years of assessment 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 the period in use of such asset during such previous year or years shall be taken into account in determining the amount by which the value of such machinery, plant, implement, utensil or article has been diminished; and
[Paragraph (ix) added by section 15(c) of Act 59 of 2000, substituted by section 18(1)(c) of Act 60 of 2008 and by section 18(1)(c) of Act 25 of 2015 and amended by section 8(1)(b) of Act 20 of 2022 deemed effective on 29 July 2022 and applicable in respect of years of assessment ending on or after that date]
(x) no allowance may be made in respect of any machinery, plant, implement, utensil or article acquired by the taxpayer as or with a “government grant” as defined in section 12P(1);
[Paragraph (e) amended by section 9(a) of Act 90 of 1962 and by section 9(a) of Act 90 of 1964, substituted by section 11(1)(a) of Act 88 of 1965 and amended by section 8(1)(b) of Act 90 of 1988, by section 11(1)(a) of Act 101 of 1990, by section 6(a) of Act 9 of 2005, by section 18(a) of Act 31 of 2005, by section 10(1)(a) of Act 3 of 2008, by section 19(1)(a) of Act 7 of 2010, by section 27(1)(a) of Act 31 of 2013, by section 26(1)(a) of Act 15 of 2016 and by section 11(1)(a) of Act 17 of 2023 effective on 1 March, 2023 and applicable in respect of assets brought into use on or after 1 March, 2023. Paragraph (x) added by section 8(1)(b) of Act 20 of 2022 effective on 29 July, 2022 and applicable in respect of years of assessment ending on or after that date]