Page 222 - SAIT Compendium 2016 Volume2

IN 9 (5) Income Tax acT: InTeRPReTaTIon noTes IN 9 (5) ANNEXURE C
Plant or machinery (‘an asset’) used by an SBC directly in a process of manufacture or process of similar nature
Is an asset acquired by an SBC for no consideration?
Yes
Is the asset owned by or acquired by SBC in terms of an instalment credit agreement as de ned in VAT Act?
No
No
Yes
Is the asset brought into use by the SBC in the process of manufacture (or process of similar nature) for the 1st time on or after 1 April 2001?
No
Yes
The asset does not qualify for a 100% deduction under section 12E (1), but quali es for an allowance under section 11 (e).
The asset quali es for a 100% deduction under section 12E (1).
ANNEXURE D
Other assets used by an SBC not in a process of manufacture or process of a similar nature
Are other assets acquired for no consideration?
Yes
Were the other assets acquired by the SBC under the agreement formally and nally signed by the contracting parties on or after 1 April 2005?
No
No
Yes
At option of SBC (a) or (b)
Other assets do not qualify for the 50%; 30% and 20% deduction over the three year period but qualify for an allowance under section 11 (e).
(a)
Section 12E (1A) (a) Other assets qualify for an allowance under section 11 (e).
(b)
Section 12E (1A) (b) Other assets qualify for a 50%; 30% and 20% deduction over the three year period.
214 saIT comPendIum oF Tax LegIsLaTIon VoLume 2