Page 255 - Juta's Indirect Tax

s 9
MINERAL AND PETROLEUM RESOURCES ROYALTY ACT 28 OF 2008 s 12
(b)
(iii) an intra-group transaction mentioned in section 45 of the Income Tax Act;
(iv) a liquidation distribution mentioned in section 47 of the Income Tax Act; or
(v) any transaction which would have constituted a transaction or distribution mentioned in subparagraphs (i) to (iv) regardless of whether that extractor acquired that mineral resource as a capital asset or as trading stock; and
the extractor to whom the mineral resource is disposed of, immediately after a transaction contemplated in paragraph (a) (i), (ii), (iii), (iv) or (v), quali es for registration in terms of section 2 (1) (a) of the Administration Act.
[Sub-s. (1A) inserted by s. 100 (1) of Act 17 of 2009.]
(2) To the extent that the gross sales determined in terms of section 6 (1) (a) or section 6 (2) (a) differ from the gross sales that an extractor would have taken into account if the gross sales had been derived from transactions entered into at arm’s length, the Commissioner may adjust the gross sales to re ect the gross sales that would have been taken into account.
12 General anti-avoidance rule
(1) Notwithstanding anything to the contrary in this Act, if the Commissioner is satis ed that a disposal, transfer, operation, scheme or understanding (whether entered into or carried out before or after the commencement of this Act)—
(a) has been entered into or carried out, which has the
effect of avoiding or postponing liability for the
royalty, or of reducing the amount thereof;
(b) having regard to the circumstances under which the disposal, transfer, operation, scheme or understanding
was entered into or carried out—
(i) was entered into or carried out—
(aa) in the case of a disposal, transfer, operation, scheme or understanding in the context of business, in a manner which would not normally be employed for bona de business purposes, other than the obtaining of a royalty bene t; and
(bb) in the case of any other disposal, transfer, operation, scheme or understanding not falling within the provisions of item (aa), by means or in a manner which would not normally be employed in the entering into or carrying out of a disposal, transfer, operation, scheme or understanding of the nature of the disposal, transfer, operation, scheme or understanding in question; or
(ii) has created rights or obligations which would not normally be created between persons dealing at arm’s length under a disposal, transfer, operation, scheme or understanding of the nature of the disposal, transfer, operation, scheme or understanding in question; and
(c) was entered into or carried out solely or mainly for the purposes of obtaining a royalty bene t,
the Commissioner must determine the liability for the royalty, and the amount thereof, as if the disposal, transfer, operation, scheme, or understanding had not been entered into or carried out, or in such manner as the Commissioner in the circumstances deems appropriate for the prevention or diminution of avoidance, postponement or reduction.
(2) A decision of the Commissioner under subsection (1) is subject to objection and appeal in accordance with Chapter 9 of the Tax Administration Act, 2011 (Act 28 of 2011), and whenever in proceedings relating thereto it is proved that the disposal, transfer, operation, scheme or understanding in question would result in the avoidance or postponement of liability for the royalty, or in the reduction of the amount thereof, it is presumed, until the contrary is proved, in the case of any such disposal, transfer, operation, scheme or understanding, that it was entered into or carried out solely or mainly for the purposes of the avoidance or the postponement of such liability, or the reduction of the amount of such liability.
[Sub-s. (2) substituted by s. 27 of Act 39 of 2013 – date of commencement: 16 January 2014.]
(3) For purposes of this section, ‘royalty bene t’ includes any avoidance, postponement or reduction of the liability for payment of the royalty mentioned in section 2.
(2) For purposes of this Act an extractor that acquires a mineral resource in terms of a disposal mentioned in subsection (1) is deemed to be the extractor that won or recovered the mineral resource.
10 Transfer involving body of unincorporated persons
(1) Notwithstanding any other provision in this Act, an unincorporated body of which the members made an election in terms of section 4 (1) of the Administration Act—
(a) is deemed to be a person while that election remains
in effect; and
[Para. (a) substituted by s. 151 (1) of Act 24 of 2011 – date of commencement deemed to have been 1 March 2010. This substituted paragraph applies in respect of a mineral resource transferred on or after that date.]
(b) is subject to the royalty as if that body were an extractor separate from its members, in respect of mineral resources won, recovered or transferred by that unincorporated body after taking into account any earnings before interest and taxes associated with those minerals as well as the application of any other provision of this Act bearing on the royalty determination in respect of those mineral resources.
[Sub-s. (1) amended by s. 101 (1) of Act 17 of 2009.]
(2) Notwithstanding any other provision in this Act, to the extent that any member of an unincorporated body mentioned in subsection (1) is acting in a capacity other than as a member of that body, that member is subject to the royalty as if that member were an extractor separate from that body in respect of mineral resources won, recovered or transferred by that unincorporated body after taking into account any earnings before interest and taxes associated with those minerals as well as the application of any other provision of this Act bearing on the royalty determination in respect of those mineral resources.
(3) On the date of the election made in terms of section 4 (1) of the Administration Act, the members of an unincorporated body mentioned in that section are deemed to have transferred the mineral resources to be disposed of by that body, which had been won or recovered by those members.
(4) On the date on which an unincorporated body terminates the election in terms of section 4 (6) of the Administration Act, the unincorporated body is deemed to have transferred the mineral resources won or recovered by the unincorporated body to the members of that unincorporated body.
11 Arm’s length transactions
(1) To the extent that the earnings before interest and taxes determined in terms of section 5 differ from the earnings that an extractor would have taken into account if those earnings had been derived from transactions entered into at arm’s length, the Commissioner may adjust the earnings to re ect the earnings that would have been taken into account.
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MINERAL AND PETROLEUM RESOURCES ROYALTY ACT