“International tax standard” definition of TAA

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“international tax standard” means-

(a)     the OECD Standard for Automatic Exchange of Financial Account Information in Tax Matters;

(b)     the Country-by-Country Reporting Standard for Multinational Enterprises specified by the Minister; or

(c)     any other international standard for the exchange of tax-related information between countries specified by the Minister,

subject to such changes as specified by the Minister in a regulation issued under section 257;

[Definition of “international tax standard” inserted by section 33 of Act 23 of 2015 effective on 8 January 2016]

Paragraph 64D (Eighth Schedule) – Land donated in terms of land reform measures

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64D.  Land donated in terms of land reform measures

A person must disregard any capital gain or capital loss in respect of the disposal by way of a donation of land or right to land by virtue of the measures as contemplated in Chapter 6 of the National Development Plan: Vision 2030 of 11 November 2011 released by the National Planning Commission, Presidency of the Republic of South Africa.

[Paragraph 64D inserted by section 77 of Act 15 of 2016 effective on 29 February 2016, applies in respect of years of assessment ending on or after that date]

“Social and labour plan” definition of section 36 of ITA

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“social and labour plan” means social and labour plan as contemplated in Part II of the Mineral and Petroleum Resources Development Regulations, 2004 (Government Notice R. 527 published in Government Gazette No. 26275 of 23 April 2004), made by the Minister of Minerals and Energy in terms of section 107(1) of the Mineral and Petroleum Resources Development Act.

[Definition of “social and labour plan” inserted by section 52 of Act 15 of 2016 effective on 1 April 2017, applies in respect of expenditure incurred during years of assessment commencing on or after that date]

Section 12U (ITA) – Additional deduction in respect of roads and fences in respect of production of renewable energy

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12U.  Additional deduction in respect of roads and fences in respect of production of renewable energy

(1)     There must be allowed to be deducted by a person any amount actually incurred during the year of assessment in which that expenditure is incurred, subject to subsection (3), in respect of-

(a)     the construction of any road or the erecting of any fence and a foundation or supporting structure designed for such a fence for the purpose of trade of that person of generation of electricity which exceeds 5 megawatts from-

(i)      wind power;

(ii)     solar energy;

(iii)    hydropower to produce electricity of not more than 30 megawatts; or

(iv)    biomass comprising organic wastes, landfill gas or plant material; or

(b)     improvements (other than repairs) to-

(i)      any road or fence contemplated in paragraph (a); or

(ii)     foundation or supporting structure designed for such a fence, subject to subsection (2).

(2)       For the purpose of any deduction under subsection (1)-

(a)     the foundation or supporting structure designed for a fence must be constructed in such manner that the foundation or supporting structure is or should be regarded as being integrated with that fence; and

(b)     the useful life of the foundation or supporting structure is or will be limited to the useful life of that fence.

(3)       For purposes of deduction under subsection (1) any expenditure-

(a)     actually incurred by that person prior to the commencement of and in preparation for carrying on that trade;

(b)     which would have been allowed as a deduction in terms of subsection (1) had the expenditure been incurred after that person commenced carrying on that trade; and

(c)     which was not allowed as a deduction in any previous year of assessment,

shall be allowed as a deduction in terms of this section.

[Section 12U inserted by section 36 of Act 15 of 2016 effective on 1 April 2016, applies in respect of years of assessment commencing on or after that date]

Section 12S (ITA) – Deduction in respect of buildings in special economic zones

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12S.   Deduction in respect of buildings in special economic zones

(1)     For the purposes of this section, ‘qualifying company’ means a qualifying company as defined in section 12R, notwithstanding section 12R(4).

[Subsection (1) substituted by section 35 of Act 15 of 2016 effective on 19 January 2017]

(2)     A qualifying company may deduct from the income of that qualifying company an allowance equal to ten per cent of the cost to the qualifying company of any new and unused building owned by the qualifying company, or any new and unused improvement to any building owned by the qualifying company, if that building or improvement is wholly or mainly used by the qualifying company during the year of assessment for purposes of producing income within a special economic zone, as defined in section 12R(1), in the course of the taxpayer’s trade, other than the provision of residential accommodation.

[Subsection (2) substituted by section 27 of Act 43 of 2014 effective on the date on which the Special Economic Zones Act is operational]

(3)     If a qualifying company completes an improvement as contemplated in section 12N, the expenditure incurred by the qualifying company to complete the improvement must be deemed to be the cost to the qualifying company of any new and unused building or of any new and unused improvement to a building contemplated in subsection (2).

(4)     For the purposes of this section the cost to a qualifying company of any building or improvement must be deemed to be the lesser of the actual cost to the qualifying company or the cost which a person would, if that person had acquired, erected or improved the building under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition, erection or improvement of the building was in fact concluded, have incurred in respect of the direct cost of the acquisition, erection or improvement of the building.

(5)     No deduction may be allowed under this subsection in respect of any building that has been disposed of by the qualifying company during any previous year of assessment.

(6)     A deduction may not be allowed under any other section of this Act in respect of the cost of a building or improvement if any of that cost has qualified or will qualify for deduction from the qualifying company’s income as a deduction of expenditure or an allowance in respect of expenditure under this section.

(7)     The deductions which may be allowed or deemed to have been allowed in terms of this section and any other provision of this Act in respect of the cost of any building or improvement may not in the aggregate exceed the amount of such cost.

(8)     The Commissioner may, notwithstanding the provisions of sections 99 and 100 of the Tax Administration Act disallow all deductions otherwise provided for under this section if a qualifying company is guilty of fraud or misrepresentation or non-disclosure of material facts with regard to any tax, duty or levy administered by the Commissioner.

[Subsection (8) substituted by section 35 of Act 15 of 2016 effecive on 19 January 2017]

(9)     The Commissioner may, notwithstanding the provisions of sections 99 and 100 of the Tax Administration Act, raise an additional assessment for any year of assessment where a deduction that has been allowed in any previous year must be disallowed in terms of subsection (8).

(10)   This provision ceases to apply in respect of expenditure incurred during any year of assessment commencing on or after 1 January 2031.

[Subsection (10) substituted by section 19(1) of Act 23 of 2020 deemed effective on 9 February, 2016]

[Section 12S inserted by section 44(1) of Act 31 of 2013 effective on the date that the Special Economic Zones Act referred to in section 12R of this Act comes into operation: 9 February, 2016 (Proclamation No. R.6 in Government Gazette 39667 of 9 February, 2016) and applicable in respect of years of assessment commencing on or after that date] 

Section 10(1)(bB) of ITA

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(bB)  the receipts and accruals of the-

(i)     African Development Bank established on 10 September 1964;

(ii)    World Bank established on 27 December 1945 including the International Bank for Reconstruction and Development and International Development Association;

(iii)   International Monetary Fund established on 27 December 1945;

(iv)    African Import and Export Bank established on 8 May 1993;

(v)     European Investment Bank established on 1 January 1958 under the Treaty of  Rome;

(vi)    New Development Bank established on 15 July 2014;

[Paragraph (bB) inserted by section 23 of Act 15 of 2016 effective on 19 January 2017]

“Third-party backed instrument” definition of section 8F of ITA

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‘third-party backed instrument’ means any instrument in respect of which an enforcement right is exercisable as a result of any amount relating to that instrument not being received by or accruing to any person entitled thereto.

[Definition of ‘third-party backed instrument’ added by section 16 of Act 15 of 2016 effective on 1 January 2017, applies in respect of years of assessment commencing on or after that date]

“Enforcement right” definition of section 8F of ITA

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(1)     For the purposes of this section—


‘enforcement right’ in relation to an instrument means any right, whether fixed or contingent, to require any person other than the issuer of that instrument to-

(a)     acquire that instrument from the holder thereof;

(b)     make any payment in respect of that instrument in terms of a guarantee, indemnity or similar arrangement; or

(c)     procure, facilitate or assist with any acquisition contemplated in paragraph (a) or the making of any payment contemplated in paragraph (b);

[Definition of ‘enforcement right’ inserted by section 16 of Act 15 of 2016 effective on 1 January 2017, applies in respect of years of assessment commencing on or after that date]

“Equity instrument” definition of section 8EA of ITA

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‘equity instrument’ means a right or interest the value of which is determined directly or indirectly with reference to-

(a)     a preference share; or

(b)     an amount derived from a preference share;

[Definition of ‘equity instrument’ inserted by section 15 of Act 15 of 2016 effective on 1 January 2017, applies in respect of years of assessment ending on or after that date]