Page 610 - Juta's Indirect Tax

IN 22 (3) TRANSFER DUTY ACT IN 22 (3) Interpretation Note: No. 22 (Issue 3)
DATE: ACT: SECTION: SUBJECT:
CONTENTS
PAGE
Preamble
1. Purpose
2. Background
3. The law
4. Application of the law
4.1 Exemption of a public bene t organisation 4.1.1 Public bene t organisation
4.1.2 Public bene t activities
(a) Provision of residential care for retired persons
(b) Residential accommodation acquired to carry on religious or educational public bene t activities (c) Provision of assets to another public bene t organisation or statutory body
4.1.3 Educational institutions qualifying as public bene t organisations
4.2 Exemption for a statutory body
4.2.1 A statutory body
4.2.2 Sole or principal object of a statutory body
4.2.3 Educational institutions qualifying as statutory bodies
4.3 Meaning of ‘substantially the whole’
4.4 Non-compliance
4.5 Section 9(1A) of the Transfer Duty Act
5. Application procedure for transfer duty exemption
6. Application procedure for approval as a public bene t organisation or statutory body 7. Conclusion
Annexure A – List of public bene t activities in Part I
Annexure B – Contact details of the Tax Exemption Unit
Preamble
In this Note unless the context indicates otherwise –
• ‘Companies Act’ means the Companies Act 71 of 2008;
• ‘declaration’ means a Transfer Duty (TDC01) Declaration submitted via SARS eFiling;
• ‘Part I’ means Part I of the Ninth Schedule to the Act;
• ‘PBA’ means any ‘public bene t activity’ as de ned in section 30(1) which is listed in Part I and any other activity
determined by the Minister to be of a benevolent nature, having regard to the needs, interest and well-being of the
general public;
• ‘PBO’ means a ‘public bene t organisation’ as de ned in section 30(1)(a) and approved by the Commissioner under
section 30(3);
• ‘section’ means a section of the Act;
• ‘statutory body’ means an institution, board or body exempt from income tax under section 10(1)(cA)(i) and which
has as its sole or principal object the carrying on of one or more PBAs;
• ‘TEU’ means the Tax Exemption Unit which is a dedicated of ce within SARS that deals with applications for
approval or exemption from income tax on behalf of the Commissioner; • ‘the Act’ means the Income Tax Act 58 of 1962;
• ‘Transfer Duty Act’ means the Transfer Duty Act 40 of 1949; and
• any other word or expression bears the meaning ascribed to it in the Act.
1. Purpose
This Note provides guidance on the interpretation and application of the following sections of the Transfer Duty Act:
• Section 9(1)(c), which exempts from the payment of transfer duty a PBO or any statutory body, which has as its sole or principal object the carrying on of any PBA, provided the whole or substantially the whole of the property acquired
is used for carrying on one or more PBAs.
• Section 9(1A), which exempts from transfer duty the transfer of property by a PBO to any other entity controlled by
that PBO.
For purposes of this Note, the transactions do not constitute taxable supplies of xed property under section 7(1)(a) of the Value-Added Tax Act No. 89 of 1991.
22 September 2015
TRANSFER DUTY ACT NO. 40 OF 1949
SECTIONS 9(1)(c) AND 9(1A)
TRANSFER DUTY EXEMPTION: PUBLIC BENEFIT ORGANISATIONS AND STATUTORY BODIES
602 Juta’s IndIrect tax 2016