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IN 19 (3) Income Tax acT: InTeRPReTaTIon noTes IN 19 (3)
INTERPRETATION NOTE: NO. 19 (ISSUE 3)
Year of Assessment of Natural persons and Trusts: Accounts accepted to a Date other than the last day of February
DATE: ACT: SECTION:
SUBJECT:
CONTENTS
Preamble
9 October 2013
INCOME TAX ACT 58 OF 1962 (the Act)
Sections 1 (1), de nition of ‘year of assessment’, 5, 66 (13a) and (13b) and 89quat and paragraph 21 of fourth schedule
Year of assessment of natural persons and trusts: Accounts accepted to a date other than the last day of February
1. Purpose
2. Background
3. The law
4. Application of the law
4.1 Financial accounts drawn up for a period that differs from the year of assessment (accounting period) 4.1.1 Introduction
4.1.2 Conditions imposed by the Commissioner
4.1.3 Public bene t organisations (PBOs)
4.1.4 Share-purchase arrangements
4.1.5 General
4.2 Provisional tax
4.3 Provisional tax and accounting periods
4.4 Interest on underpayments and overpayments of provisional tax
4.5 Trading stock and livestock
4.5.1 Trading stock
4.5.2 Livestock
4.6 Effective dates of legislation
5. Conclusion
Preamble
In this Note unless the context indicates otherwise –
• ‘Schedule’ means a schedule to the Act;
• ‘section’ means a section of the Act;
• ‘accounting period’ means a period ending on a date other than the last day of February which has been approved by
the Commissioner under section 66 (13A) for the drawing up of nancial accounts by an individual or trust; • ‘TA Act’ means the Tax Administration Act 28 of 2011;
• ‘taxpayer’ means a natural person or a trust; and
• any word or expression bears the meaning ascribed to it in the Act.
1. Purpose
This Note provides guidance on the Commissioner’s discretionary power to grant permission to a natural person or trust to submit nancial accounts for a period (the ‘accounting period’) which differs from the year of assessment ending on the last day of February.
2. Background
This Note deals with natural persons and trusts that carry on a trade.
In earlier years partnerships or professionals were allowed to render accounts for their business income for periods
ending on dates other than the last day of February under section 66 (13) ter but that provision was deleted in 2002 and replaced by section 66 (13A).* Section 66(13A) came into effect on 1 July 2002 and provides that a taxpayer (individual or trust) may apply to the Commissioner to draw up nancial accounts to a date other than the last day of February when the Commissioner is satis ed that the whole or some portion of the taxpayer’s income cannot be conveniently returned for any year of assessment.
3. The law
For ease of reference, the relevant sections of the Act are quoted in the Annexure.
4. Application of the law
With effect from 1 March 2003 all natural persons and trusts have a year of assessment for a period of 12 months which runs from 1 March of one year to the last day of February of the succeeding year.
* Under section 66 (13) ter which was deleted by the Revenue Laws Amendment Act 74 of 2002 with effect from 1 July 2002 and applicable to years of assessment commencing on or after that date.
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