Page 346 - SAIT Compendium 2016 Volume2

IN 18 (3)
Income Tax acT: InTeRPReTaTIon noTes IN 18 (3)
(ii)
where the sum of any such taxes proved to be payable (excluding any taxes contemplated in paragraphs (iA) and (iB) of this proviso) exceeds the rebate as so determined (hereinafter referred to as the excess amount), that excess amount may—
(aa) be carried forward to the immediately succeeding year of assessment and shall be deemed to be a tax
on income paid to the government of any other country in that year; and
(bb be set off against the amount of any normal tax payable by that resident during that year of assessment
in respect of any amount derived from any other country which is included in the taxable income of that resident during that year, as contemplated in subsection (1), after any tax payable to the government of any other country in respect of any amount so included during such year of assessment which may be deducted in terms of subsections (1) and (1A), has been deducted from the amount of such normal tax payable in respect of such amount so included; and
(iii) the excess amount shall not be allowed to be carried forward for more than seven years reckoned from the year of assessment when such excess amount was for the rst time carried forward;
(b) ..... .
(c) ..... .
(d) ..... .
(e) ..... .
(1C) For the purpose of determining the taxable income derived by any resident from carrying on any trade, there may at the election of the resident be allowed as a deduction from the income of such resident so derived the sum of any taxes on income (other than taxes contemplated in subsection (1A)) proved to be payable by that resident to any sphere of government of any country other than the Republic, without any right of recovery by any person other than a right of recovery in terms of any entitlement to carry back losses arising during any year of assessment to any year of assessment prior to such year of assessment.
(1D) Notwithstanding the provisions of subsection (1C), the deduction of any tax proved to be payable as contemplated in that subsection shall not in aggregate exceed the total taxable income (before taking into account any such deduction) attributable to income which is subject to taxes as contemplated in that subsection, provided that in determining the amount of the taxable income that is attributable to that income, any allowable deductions contemplated in sections 11(n), 18 and 18A must be deemed to have been incurred proportionately in the ratio that that income bears to total income.
(2) The rebate under subsection (1) and the deduction under subsection (1C) shall not be granted in addition to any relief to which the resident is entitled under any agreement between the governments of the Republic and the said other country for the prevention of or relief from double taxation, but may be granted in substitution for the relief to which the resident would be so entitled.
(3) For the purposes of this section— ‘controlled company’ . . . . . . ‘controlling company’ . . . . . . ‘group of companies’ . . . . . . ‘qualifying interest’ . . . . . .
‘taxes on income’ does not include any compulsory payment to the government of any other country which constitutes a consideration for the right to extract any mineral or natural oil.
(4) For the purposes of this section the amount of any foreign tax proved to be payable as contemplated in subsection (1A) or (1C) in respect of any amount which is included in the taxable income of any resident during any year of assessment, shall be translated to the currency of the Republic on the last day of that year of assessment by applying the average exchange rate for that year of assessment.
(4A) If the amount translated in accordance with subsection (4) includes a number of cents that is less than one rand, that amount must be rounded off to the nearest rand.
(5) Notwithstanding section 99(1) or 100 of the Tax Administration Act, an additional or reduced assessment in respect of a year of assessment to give effect to subsections (1) and (1A) may be made within a period that does not exceed six years from the date of the original assessment in respect of that year.
Section 6quin
6quin. Rebate in respect of foreign taxes on income from source within Republic.—
(1) Subject to subsections (3) and (3A), where any portion of the taxable income of a resident is attributable to an amount that is from a source within the Republic and is received by or accrued to that resident in respect of services
rendered within the Republic, and an amount of tax in respect of that amount is—
(i) levied by any sphere of government of any country—
(aa) other than the Republic; and
(bb) with which the Republic has concluded an agreement for the avoidance of double taxation; and
(a)
(b)
a rebate determined in accordance with subsection (2) must be deducted from the normal tax payable by that resident.
(ii) withheld when the amount is paid to that resident by the person making the payment; or imposed by any sphere of government of any country—
(aa) other than the Republic; and
(bb) with which the Republic has not concluded an agreement for the avoidance of double taxation, in terms of the laws of that country,
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