Page 347 - SAIT Compendium 2016 Volume2

IN 18 (3) Income Tax acT: InTeRPReTaTIon noTes IN 18 (3)
(2) (a) For the purposes of paragraph (a) of subsection (1), the rebate is an amount equal to the lesser of—
(i) the amount of normal tax which is attributable to the amount received or accrued as contemplated in
that subsection; or
(ii) the amount of tax levied and withheld as contemplated in that paragraph.
(b) For the purposes of paragraph (b) of subsection (1), the rebate is an amount equal to the lesser of—
(i) the amount of normal tax which is attributable to the amount received or accrued as contemplated in that
subsection; or
(ii) the amount of tax imposed as contemplated in that paragraph.
(3) No rebate may be deducted in terms of this section if—
(a) the amount of tax levied and withheld as contemplated in subsection (1)(a); (b) the amount of tax imposed as contemplated in subsection (1)(b); or
(c) any portion of any amount contemplated in paragraph (a) or (b),
is—
(i) taken into account in determining any amount of any rebate that is, in terms of section 6quat(1), deducted from the normal tax payable by that resident; or
(ii) deducted from the income of that resident in terms of section 6quat(1C).
(3A) Where an amount of tax is levied and withheld as contemplated in subsection (1)(a), no
rebate may be deducted in terms of this section if the resident contemplated in subsection (1) does not, within 60 days from the date on which that amount of tax is withheld, submit to the Commissioner a return that the amount of tax was levied and withheld as contemplated in subsection (1)(a).
(4) For the purposes of subsection (2)(a)(ii) and (b)(ii), the amount of any tax— (a) levied and withheld as contemplated in subsection (1)(a); or
(b) imposed as contemplated in subsection (1)(b),
must be translated to the currency of the Republic on the last day of the year of assessment in which
that tax is so levied and withheld or imposed, by applying the average exchange rate for that year of assessment.
(5) Where, during any year of assessment, a rebate has been deducted in terms of this section from the normal tax payable by a resident as a result of any amount of tax having been—
(a) levied and withheld as contemplated in subsection (1)(a); or
(b) imposed as contemplated in subsection (1)(b),
and, in any year of assessment subsequent to that year of assessment, the resident—
(i) receives any amount by way of refund in respect of the amount of tax so levied and withheld; or (ii) is discharged from any liability in respect of the amount of tax so imposed,
so much of the amount so received or the amount of that discharge as does not exceed that rebate must be deemed to be an amount of normal tax payable by that resident in respect of that subsequent year of assessment.
Section 64N
64N. Rebate in respect of foreign taxes on dividends.—(1) A rebate determined in accordance with this section must be deducted from the dividends tax payable in respect of a dividend contemplated in paragraph (b) of the de nition of ‘dividend’ in section 64D.
(2) The amount of the rebate contemplated in subsection (1) is equal to the amount of any tax paid to any sphere of government of any country other than the Republic, without any right of recovery by any person, on a dividend contemplated in subsection (1).
(3) The amount of the rebate contemplated in subsection (2) must not exceed the amount of the dividends tax imposed in respect of the dividend contemplated in subsection (1).
(4) For the purposes of this section, the amount of any tax paid as contemplated in subsection (2) must be translated to the currency of the Republic by applying the exchange rate used to convert the amount of the dividend in respect of which that tax is paid to the currency of the Republic.
(5) A company or regulated intermediary must obtain proof of any tax paid to any sphere of government of any country other than the Republic and deducted from the dividend tax payable in terms of this section, in the form and manner prescribed by the Commissioner.
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