Page 1152 - SAIT Compendium 2016 Volume2

EXPLANATORY MEMORANDUM ON THE TAXATION LAWS AMENDMENT BILL, 2015
See notes on DEFINITION OF INTEREST FOR WITHHOLDING TAX PURPOSES
CLAUSE 71
Income Tax: Amendment to section 50D
Sub-clause (a): Amendment to item (cc) of subsection (1)(a)(i): Amendment corrects grammatical error by changing
the word ‘exclusions’ to the word ‘exclusion’.
Sub-clauses (b): Insertion of new paragraph (c) of subsection (1): Amendment makes provision for exemption for
withholding tax on interest in respect of interest paid to a foreign person for debt owed by another foreign person, unless the other foreign person was present in South Africa for a period exceeding 183 days or the debt claim is effectively connected to a permanent establishment in South Africa.
CLAUSE 72
Income Tax: Amendment to section 56
The proposed amendment in subparagraph (ii) of subsection (1)(k) corrects a grammatical error in the Afrikaans text.
CLAUSE 73
Income Tax: Amendment to section 64D
See notes on TRANSITIONAL TAX ISSUES RESULTING FROM THE REGULATION OF HEDGE FUNDS
CLAUSE 74
Income Tax: Amendment to section 64EB
Deletion of subparagraphs (viii), (ix) and (xii) in subsection (2)(a): The proposed amendments delete obsolete
references.
CLAUSE 75
Income Tax: Amendment to section 64F
Amendment to paragraph (o) of subsection (1): In 2015, Tax Free Investment was introduced in the Income Tax Act
to encourage savings to exempt any amount received or accrued in respect of tax free investment. The de nition of Tax Free Investment includes any nancial instrument or policy owned by a natural person or the deceased estate or insolvent estate. However, the current provisions in paragraph (o) regarding exemption from dividend tax only refer to natural person and it does not refer to deceased estate or insolvent estate. In order to align the provisions of section paragraph (o) with the de nition of Tax Free Investment, it is proposed that amendments be made to paragraph (o) to include deceased estate or insolvent estate.
CLAUSE 76
Income Tax: Amendment to paragraph 7 of the First Schedule Amendments remove reference to discretion.
CLAUSE 77
Income Tax: Amendment to paragraph 9 of the First Schedule Amendments remove reference to discretion.
CLAUSE 78
Income Tax: Amendment to paragraph 11 of the First Schedule Amendments remove reference to discretion.
CLAUSE 79
Income Tax: Amendment to paragraph 13 of the First Schedule
Sub-clause (a): Amendments remove reference to Commissioner’s discretion. Sub-clause (b): The amendment proposes to delete obsolete provisions.
CLAUSE 80
Income Tax: Amendment to paragraph 14 of the First Schedule Amendments remove reference to discretion.
CLAUSE 81
Income Tax: Amendment to paragraph 19 of the First Schedule Amendments remove reference to Commissioner’s discretion.
CLAUSE 82
Income Tax: Amendment to paragraph 20 of the First Schedule Amendments remove reference to discretion.
CLAUSE 83
Income Tax: Amendment to paragraph 3 of the Second Schedule
The amendment proposes to standardise reference to the Pension Funds Act in the Income Tax Act.
CLAUSE 84
Income Tax: Amendment to paragraph 3A of the Second Schedule
The amendment proposes to standardise reference to the Pension Funds Act in the Income Tax Act.
Commissioner’s Commissioner’s Commissioner’s
Commissioner’s
Commissioner’s
1144 SAIT CompendIum oF TAx LegISLATIon VoLume 2