Page 1149 - SAIT Compendium 2016 Volume2

EXPLANATORY MEMORANDUM ON THE TAXATION LAWS AMENDMENT BILL, 2015
CLAUSE 40
Income Tax: Amendment to section 23N
Amendments to the de nition of paragraph (a) and (b) of ‘acquisition transaction’ in subsection (1).
Amendments are consequential amendments to section 24O. See notes on DEBT-FINANCED ACQUISITIONS OF CONTROLLING SHARE INTERESTS
CLAUSE 41
Income Tax: Amendment to section 24
Amendments to subsection (2) remove reference to Commissioner’s discretion.
CLAUSE 42
Income Tax: Amendment to section 24C
Amendments to subsections (1) and (2) remove reference to Commissioner’s discretion.
CLAUSE 43
Income Tax: Amendment to section 24D
Amendments to subsections (1) and (2) remove reference to Commissioner’s discretion
CLAUSE 44
Income Tax: Amendment to section 24I
Sub-clause (a): Deletion of the de nition of ‘premium or discount on a forward exchange contract’ in subsection (1):
Amendment deletes obsolete provisions
Sub-clause (b): Amendments to the de nition of ‘ruling exchange rate’ in subsection (1). The current wording in
the de nition of ‘ruling exchange rate’ refers to the following words ‘for accounting purposes in returns of Generally Accepted Accounting Practices’. It is proposed that the reference to GAAP should be replaced with reference to International Financial Reporting Standards, which is similar to wording in section 24I(10A)(a)(ii)(aa).
Sub-clause (c): Amendments in subsection (7) delete reference to section 37E as section 37E was deleted in 2008. Sub-clause (d): Amendments to the proviso in subsection (7) remove reference to Commissioner’s discretion. Sub-clause (e): Amendments to subsection (10) in the Afrikaans text corrects wording to match current IFRS
terminology.
CLAUSE 45
Income Tax: Amendment to section 24JA
See notes on EXTENSION OF MURABAHA AND SUKUK TO LISTED ENTITIES
CLAUSE 46
Income Tax: Amendment to section 24O
See notes on DEBT-FINANCED ACQUISITIONS OF CONTROLLING SHARE INTERESTS
CLAUSE 47
Income Tax: Amendment to section 24P
Amendments to subsections (1) and (2) remove reference to Commissioner’s discretion.
CLAUSE 48
Income Tax: Amendment to section 25
See notes on REMOVING ANOMALIES FOR INCOME AND DISPOSAL TO AND FROM DECEASED
ESTATES
CLAUSE 49
Income Tax: Amendment to section 25A
Amendments to subsection (1) remove reference to Commissioner’s discretion.
CLAUSE 50
Income Tax: Amendment to section 25BB
Sub-clause (a): De nition of ‘qualifying distribution’ in subsection 1. Amendments gives alteration to the de nition
of qualifying distribution in relation to a new REIT or controlled company that was inactive prior to the company being a REIT or controlled company.
Sub-clause (b):
• Insertion of new subsection (2A)(a) - See notes on ALLOWING REITS TO DEDUCT FOREIGN TAXES PAID
BY FOREIGN VESTING TRUST
• Insertion of new subsection (2A)(b) – See notes on ALLOWING REITS TO DEDUCT FOREIGN WITHHOLDING
TAXES ON DISTRIBUTIONS MADE BY FOREIGN VESTING TRUST
• Insertion of new subsection (2A)(c) – See notes on ALLOWING REITS TO DECUCT TAX DEDUCTIBLE
DONATIONS
Sub-clause (c): Deletion of subsection (3) – See notes on REPEAL OF FINANCIAL INSTRUMENT REQUIREMENTS ON AMOUNTS TO BE INCLUDED IN THE INCOME OF A REIT
Sub-clause (d): Amendment to subsection (6) updates wording such that it is clear that the amount is deemed to be either a dividend or foreign dividend depending on the resident status of the property company incurring the interest.
SAIT CompendIum oF TAx LegISLATIon VoLume 2 1141