“foreign return of capital” means any amount that is paid or payable by a foreign company in respect of any share in that foreign company where that amount is treated as a distribution or similar payment (other than an amount that constitutes a foreign dividend) by that foreign company for the purposes of the laws relating to-

(a)     tax on income on companies of the country in which that foreign company has its place of effective management; or

(b)     companies of the country in which that foreign company is incorporated, formed or established, where that country in which that foreign company has its place of effective management does not have any applicable laws relating to tax on income,

but does not include any amount so paid or payable to the extent that the amount so paid or payable-

(i)      is deductible by that foreign company in the determination of any tax on income of companies of the country in which that foreign company has its place of effective management; or

(ii)     constitutes shares in that foreign company;

‘foreign partnership’, in respect of any year of assessment, means any partnership, association, body of persons or entity formed or established under the laws of any country other than the Republic if-

(a)     for the purposes of the laws relating to tax on income of the country in which that partnership, association, body of persons or entity is formed or established-

(i)      each member of the partnership, association, body of persons or entity is required to take into account the member’s interest in any amount received by or accrued to that partnership, association, body of persons or entity when that amount is received by or accrued to the partnership, association, body of persons or entity; and

 

(ii)     the partnership, association, body of persons or entity is not liable for or subject to any tax on income, other than a tax levied by a municipality, local authority or a comparable authority, in that country; or

[Subparagraph (ii) substituted by section 3 of Act 25 of 2015 effective on 31 Deccember 2015]

(b)     where the country in which that partnership, association, body of persons or entity is formed or established does not have any applicable laws relating to tax on income-

(i)     any amount-

(aa)    that is received by or accrues to; or

(bb)    of expenditure that is incurred by,

the partnership, association, body of persons or entity is allocated concurrently with the receipt, accrual or incurral to the members of that partnership, association, body of persons or entity in terms of an agreement between those members; and

(ii)     no amount distributed to a member of a partnership, association, body of persons or entity may exceed the allocation contemplated in subparagraph (i) after taking into account any prior distributions made by the partnership, association, body of persons or entity;

“neighbouring country” means Botswana, eSwatini, Lesotho and Namibia;

[Definition of “neighbouring country” inserted by section 2(1)(a) of Act 85 of 1987 and substituted by section 2(e) of Act 141 of 1992, by section 2(c) of Act 36 of 1996 and by section 3 of Act 16 of 2022]

“municipal value” means an amount determined in terms of section 46 of the Local Government: Municipal Property Rates Act, 2004 (Act No. 6 of 2004);

“municipality” means a municipality which is within a category listed in section 155(1) of the Constitution of the Republic of South Africa, 1996, and which is an organ of state within the local sphere of government exercising legislative and executive authority within an area determined in terms of the Local Government: Municipal Demarcation Act, 1998 (Act No. 27 of 1998);