Section 39 (ITA) – Redetermination of company’s status

39.  Redetermination of company’s status

 

If owing to changes in the constitution or shareholding of any company which has been recognized as a public company under paragraph (a), (b) or (c) of subsection (2) of section 38, or for any other reason, the Commissioner is no longer satisfied of the matters of which he is in terms of the applicable paragraph required to be satisfied, or the company ceases to comply with the requirements of that paragraph, the Commissioner may notify the public officer of the company that it will as from the next succeeding specified date be recognized as a private company.

 

40.    ……….

Section 38 (ITA) – Classification of companies

38.  Classification of companies

(1)     For the purposes of this Act a company shall in respect of each year of assessment be recognized as either a public or a private company, and the Commissioner shall upon the request of any company inform that company whether it is recognized as a public company or as a private company..

(2)     The following companies shall, subject to the provisions of section 39, be recognized as public companies, namely –

(a)     any company all classes of whose equity shares are publicly quoted on the specified date by a stock exchange in the list issued under its authority, provided-

[Words preceding subparagraph (i) substituted by section 58 of Act 25 of 2015 effective on 8 January 2016]

(i)      that the stock exchange is a recognized and bona fide stock exchange under adequate control;

(ii)     that the rules and regulations of the stock exchange for granting and continuing a quotation for the purchase and sale of shares provide for full protection of the interests of the public in regard to dealings in the shares of the company;

(iii)    that the memorandum of incorporation prohibits such restrictions on the right to acquire or transfer any of its shares as are likely to preclude members of the general public from becoming shareholders in any class of the company’s shares; and

(iv)    that the general public was throughout the year of assessment in question interested either directly as shareholders in the company or indirectly as shareholders in any other company, in more than forty per cent. of every class of equity shares issued by the company;

(b)     any other company, not being a private company as defined in section 1 of the Companies Act, nor a close corporation, if–

(i)      the general public was throughout the year of assessment in question interested either directly as shareholders in the company or indirectly as shareholders in any other company, in more than fifty per cent of every class of equity shares issued by the company; and

(ii)     the business of the company is conducted and its profits are distributed in such a manner that no person enjoys or receives or is entitled to enjoy or receive, by reason of shareholding, participation in the management or otherwise, any advantage which would not be enjoyed or received by him if the company had been under the control of a board of directors acting in the best interests of all its shareholders and had been one which could have been recognized as a public company under paragraph (a);

[Paragraph (b) amended by section 16 of Act 90 of 1964, section 31 of Act 85 of 1974, section 24 of Act 121 of 1984 and section 59 of Act 7 of 2010, substituted by section 58 of Act 25 of 2015 effective on 8 January 2016]

(c)     any company which has been approved as a public benefit organisation in terms of the provisions of section 30(3);

(d)     any co–operative;

(e)     any insurance society or company subject to assessment in terms of section 28, 29 or 29A;

(f)      any public utility company, established by or under a special Act of Parliament;

(g)     any company the sole or principal business of which in the Republic is mining for gold or diamonds;

(h)     any company to which the provisions of section thirty–three apply; and

(3)     A company which is not recognized as a public company shall be recognized as a private company.

(4)     For the purposes of this section –

(a)     the general public in relation to any company (in this paragraph referred to as the company) shall be deemed not to include –

(i)      any director of the company; or

(ii)     any relative of any director of the company, unless such relative, if he is not the spouse or minor child of such director, has at all relevant times exercised his rights as a shareholder in the company or in any other company through which such relative is interested in the shares of the company, independently of such director; or

[Subparagraph (ii) substituted by section 58 of Act 25 of 2015 effective on 8 January 2016]

(iii)    the executor of the deceased estate or the trustee of the insolvent estate of any person referred to in sub-paragraph (i) or (ii); or

(iv)    any person to the extent that he acts in a fiduciary capacity, or as a nominee, for the benefit of any person who is not in fact or in terms of any other provision of this subsection a member of the general public in relation to the company; or

(v)     any man or his wife or any minor child of any man or his wife, if one or more of such persons are directly or indirectly interested (otherwise than by virtue of any shareholding in any public company or any private company which is interested in the shares of the company through a direct or indirect interest in the equity shares in a public company) in altogether more than 15 per cent of any class of equity shares issued by the company;

(b)     the general public in relation to any company (in this paragraph referred to as the company) shall be deemed to include –

(i)      any benefit fund, pension fund, pension preservation fund, provident fund, provident preservation fund or retirement annuity fund or any trust or institution which is of a public character, and

[Subparagraph (i) substituted by section 24 of Act 3 of 2008 and section 58 of Act 25 of 2015 effective on 8 January 2016]

(ii)     any person to the extent that he acts in a fiduciary capacity, or as a nominee, for the benefit of any person who is in fact or in terms of any other provision of this subsection a member of the general public in relation to the company;

(c)     where any person –

(i)      being a public company, is indirectly interested in any shares of any other company; or

(ii)     being a member of the general public in relation to any company, is indirectly interested in any shares of that company,

by virtue of the said person being a shareholder in any private company and such interest is not attributable to a direct or indirect interest of such private company in the equity shares in a public company, the said person shall be deemed to be interested in only that portion of such shares as such person would be entitled to receive if every company through which that person is interested in those shares were to be wound up or liquidated and the assets of each such company were, without regard to its liabilities, to be distributed among its shareholders;

[Words following subparagraph (ii) substituted by section 59 of Act 7 of 2010 and section 58 of Act 25 of 2015 effective on 8 January 2016]

(d)     where persons are jointly interested, whether directly or indirectly, but otherwise than through a direct or indirect interest in the equity shares of a public company, in the shares of any company, each such person shall be deemed to be interested in only such proportion of those shares as he would be entitled to receive if the joint interest of all such persons in such shares were to be divided between such persons.

[Paragraph (d) substituted by section 59 of Act 7 of 2010 and section 58 of Act 25 of 2015 effective on 8 January 2016]

[Subsection (4) added by section 16 of Act 90 of 1964]

Section 37O (ITA) – Currency of payments made to Commissioner

37O.    ……….

[Section 37O inserted inserted by section 11 of Act 21 of 2012 effectiv eon 1 July 2013 – insertion by section 11 of Act 21 of 2012 repealed by section 66 of Act 44 of 2014 effective on 30 June 2013 – section 37O substituted with previous version as it was prior to the amendment by section 11 of Act 21 of 2012]

Section 37N (ITA) – Refund of withholding tax on interest

37N.    ……….

[Section 37N inserted by section 66 of Act 24 of 2011, repealed by section 68 of Act 22 of 2012 effective on 31 December 2012, inserted by section 11 of Act 21 of 2012 effective on 1 July 2013 – insertion by section 11 of Act 21 of 2012 repealed by section 66 of Act 44 of 2014 effective on 30 June 2013 – section 37N substituted with previous version as it was prior to the amendment by section 11 of Act 21 of 2012]

Section 37M (ITA) – Payment and recovery of tax

37M.   ……….

[Section 37M inserted by section 58 of Act 7 of 2010, substituted by section 65 of Act 24 of 2011, repealed by section 68 of Act 22 of 2012 effective on 31 December 2012, inserted by section 11 of Act 21 of 2012 effective on 1 July 2013 – insertion by section 11 of Act 21 of 2012 repealed by section 66 of Act 44 of 2014 effective on 30 June 2013 – section 37M substituted with previous version as it was prior to the amendment by section 11 of Act 21 of 2012]

Section 37L (ITA) – Withholding of withholding tax on interest by payers of interest

37L.    ……….

[Section 37L inserted by section 58 of Act 7 of 2010, amended by section 64 of Act 24 of 2011, repealed by section 68 of Act 22 of 2012 effective on 31 December 2012, inserted by section 11 of Act 21 of 2012 effecttive on 1 July 2013 – insertion by section 11 of Act 21 of 2012 repealed by section 66 of Act 44 of 2014 effective on 30 June 2013 – section 37L substituted with previous version as it was prior to the amendment by section 11 of Act 21 of 2012]

Section 37G (ITA) – Determination of taxable income derived from small business undertakings

37G.    Determination of taxable income derived from small business undertakings

(1)     The Minister of Finance may make regulations to facilitate compliance with the provisions of this Act by natural persons who carry on business through small business undertakings, whether as sole proprietors or in partnership with other natural persons.

(2)     A regulation made under subsection (1) may –

(a)     prescribe what shall constitute a small business undertaking, having regard to –

(i)      the nature of the undertaking;

(ii)     the turnover, taxable income or profit of the undertaking;

(iii)    the number of persons employed in the undertaking;

(iv)    the nature and extent of other income derived by the proprietor or partners; and

(v)     any other feature which, in the opinion of the said Minister, indicates that an undertaking should be regarded as a small business undertaking;

(b)     provide for the variation of any provision of this Act relating to the determination of the taxable income derived from a small business undertaking, including –

(i)      the determination of taxable income having regard only to amounts actually received or expended;

(ii)     any variation in the manner in which the values of trading stock are taken into account;

(iii)    the manner in which expenditure of a capital nature incurred is to be treated; and

(iv)    any other provision which, save in so far as the timing of the receipt or accrual of income or the incurral of expenditure is concerned, will not result in a material variation in the determination of the taxable income derived by the undertaking over a period of time;

(c)     provide for the exemption from, or extension of time limits in, any provision of this Act relating to the preparation and submission of documents, accounts, returns or payments;

(d)     make such other provision as in the opinion of the said Minister will facilitate the carrying on of small business undertakings.


37H.      ……….

Section 37F (ITA) – Determination of taxable income derived by persons previously assessable under certain other laws

37F.  Determination of taxable income derived by persons previously assessable under certain other laws

 

Where it is necessary for any rule provided in this Act as to the inclusion in the income of any taxpayer for any year or as to the deduction or set–off of any amount from or against his income for such year, that regard shall be had to anything that has been done or has occurred in or in relation to a previous year of assessment, anything that has in fact been done or has in fact occurred in or in relation to a year of assessment during which the taxpayer was assessable for taxation purposes in terms of any law of a former self–governing territory declared under section 26 of the repealed Self–governing Territories Constitution Act, 1971 (Act No. 21 of 1971), to be a self–governing territory or of the former Republic of Transkei, Bophuthatswana, Venda or Ciskei for any year of assessment, shall, subject to such adjustments as may in the circumstances be appropriate, for the purposes of applying such rule be taken into account.