Page 352 - SAIT Compendium 2016 Volume2

IN 19 (3) Income Tax acT: InTeRPReTaTIon noTes IN 19 (3)
Example 7 – Resident partner of foreign partnership
Facts:
X is a partner in a partnership conducting business in Lesotho. X is the only partner resident in South Africa. The partnership draws up its nancial accounts to the end of June.
Result:
X will be permitted to render nancial accounts for the partnership to the end of June.
Objection and appeal
The discretionary powers of the Commissioner under section 66 (13A) are not subject to objection and appeal [see section 3 (4) (b) which does not include section 66 (13A].
Changed circumstances requiring a fresh application
A new application must be submitted if the circumstances of the taxpayer change.
4.2 Provisional tax
All taxpayers who fall within the de nition of the term ‘provisional taxpayer’ as de ned in paragraph 1 of the Fourth Schedule are liable for the payment of provisional tax, payable twice a year with an optional additional payment (third payment if applicable) as follows:
• First payment
• Second payment
• Third payment
– Six months after the commencement of the year of assessment, that is, 31 August. – End of the year of assessment, that is, 28/29 February.
– Seven months after the end of the year of assessment, that is, 30 September.
4.3 Provisional tax and accounting periods
If approval has been granted to a taxpayer to submit nancial accounts to a date falling after the last day of February (that is, from March to September), the taxpayer may apply under paragraph 21 (2) of the Fourth Schedule to make provisional tax payments in line with the closing date of the accounts.
Paragraph 21 (2) will not apply if accounts are drawn up for dates ending after September but before the last day of February because the closing date will fall within the year of assessment and not after it. In these circumstances provisional tax payments must be made on the normal dates (31 August, last day of February and 30 September).
Taxpayers must apply in writing, detailing the special circumstances to be taken into account. In the case of a partnership, each partner must apply, since the circumstances of each member of the partnership must be considered individually. The Commissioner may, having regard to the circumstances of the case, approve provisional tax payments to fall in line with the dates as approved for the accounting periods. This discretion is subject to objection and appeal [see section 3 (4) (e)].
Approval to pay provisional tax in line with the accounting period will not be granted automatically. It will be conditional on the income from the business or trading activities for which the accounting period is allowed being the main source of income giving rise to the liability to pay provisional tax. In other words, in exercising the discretion in paragraph 21 (2) of the Fourth Schedule, the Commissioner will approve payments for provisional tax in accordance with the main source of income.
Example 8 – Determination of dates to pay provisional tax
Facts:
A taxpayer receives the following income:
Business income which is the person’s main source of income with a February year-end. Farming income – approval has been granted to submit accounts with a June year-end.
Result:
The taxpayer will not receive approval to make payments of provisional tax on dates other than 31 August and the last day of February as well as on 30 September (if applicable).
If different accounting dates have been approved for income received from different sources, the dates for the payment of provisional tax will be approved having regard to the main source of income giving rise to the liability for the payment of provisional tax.
In most instances, the rst day of the accounting year will be regarded as the date from which the period for the rst payment will be reckoned. In the year of conversion, the rst payment for provisional tax will be six months from the commencement of the year of assessment in question.
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