Page 1147 - SAIT Compendium 2016 Volume2

EXPLANATORY MEMORANDUM ON THE TAXATION LAWS AMENDMENT BILL, 2015
Sub-clause (k): Deletion of paragraphs (cc) and (dd) of the proviso to paragraph (o) - Amendment deletes obsolete provisions.
CLAUSE 19
Income Tax: Amendment to section 12B
Sub-clause (a): Amendment to subparagraph (ii) of subsection (1)(h): See notes on DEPRECIATION ALLOWANCE
FOR RENEWABLE ENERGY MACHINERY
Sub-clause (b): Amendment to subsection 2: See notes on DEPRECIATION ALLOWANCE FOR RENEWABLE
ENERGY MACHINERY
Sub-clause (c): Amendments to subsection (4): Deleting reference to section 12(1) and section 27(2)(d) as both these subsections were deleted in 1991.
Sub-clause (d): Amendments to subsection (6): Deleting reference to section 12(1) and section 27(2)(d) as both these subsections were deleted in 1991 and removing reference to the Commissioner’s discretion.
CLAUSE 20
Income Tax: Amendment to section 12C
Sub-clause (a): Amendments to paragraphs (a) and (b) of subsection (1) removes reference to the Commissioner’s
discretion.
Sub-clause (b): Insertion of new paragraph (bA) of subsection (1) - See notes on ACCELERATED CAPITAL
ALLOWANCES FOR MANUFACTURING ASSETS GOVERNED BY SUPPLY AGREEMENTS
Sub-clause (c): Amendments to paragraph (c) of the proviso to subsection (1) removes reference to the Commissioner’s discretion.
CLAUSE 21
Income Tax: Amendment to section 12E
Amendments to paragraph (b) of subsection (1) removes reference to the Commissioner’s discretion.
CLAUSE 22
Income Tax: Amendment to section 12I
See notes on EXTENDING THE WINDOW PERIOD AND INTRODUCING A COMPLIANCE PERIOD FOR
THE INDUSTRIAL POLICY PROJECT TAX INCENTIVE REGIME
CLAUSE 23
Income Tax: Amendment to section 12J
In 2008 the Venture Capital Regime (VCC) was introduced in the Income Tax Act to encourage retail investment
in VCCs that are mainly directed toward investments in smaller businesses and junior mining companies. In order to qualify as a VCC, a company must meet certain requirements. In 2014, changes were made to the Income Tax Act to allow the 20% rule to be applied to the total subscription monies received together with any capital gains on any disposal of a qualifying share held at assessment every year after the 36 month period.
However, it has been noted that the policy intention regarding the above-mentioned rule has not been clearly expressed in the text of the current legislative provisions of section 12J(6A). It is proposed that changes be made in subsection (6A) in order to align the provisions of the Income Tax Act with the policy intent.
CLAUSE 24
Income Tax: Amendment to section 12L
See notes on ADJUSTMENT OF ENERGY SAVINGS TAX INCENTIVE
CLAUSE 25
Income Tax: Amendment to section 12O
Amendment removes anomalies by clarifying the interaction between section 12O [ lm incentives] and section 23(f)
[allowable deductions not allowed in determining taxable income].
CLAUSE 26
Income Tax: Amendment to section 12P
See notes on FURTHER RE-ALIGNMENT OF THE TAX TREATMENT OF GOVERNMENT GRANTS
CLAUSE 27
Income Tax: Amendment to section 12Q
Currently, the de nition of ‘South African Ship’ in section 12Q mistakenly refers to a ship which is registered in
accordance with section12Q of the Ship Registration Act. However, this section deals with the registration of property in a ship. It is proposed that an amendment be made so that the de nition of ‘South African Ship’ in section 12Q refers to a ship which is registered in accordance with Part 1 of Chapter 4 of Ship Registration Act, 1998.
CLAUSE 28
Income Tax: Amendment to section 12R
See notes on SPECIAL ECONOMIC ZONES (SEZ) ANTI-PROFIT SHIFTING PROVISION
CLAUSE 29
Income Tax: Amendment to section 12T
SAIT CompendIum oF TAx LegISLATIon VoLume 2 1139