Page 482 - SAIT Compendium 2016 Volume2

IN 50 Income Tax acT: InTeRPReTaTIon noTes IN 50
Example 18 — Recoupment
Facts:
Company X buys a machine for R45 000 and uses it for R&D activities for two years of assessment. At the end of the second year of assessment the company sells it for R40 000.
Result:
Allowances claimed under section 11D (2):
Year 1 R45 000 3 50%
Year 2 R45 000 3 30%
Total allowances claimed on machine
Recoupment under section 8 (4) (a):
Cost of machine
Less: Amounts allowed under section 11D (2) Tax value
Proceeds
Less: Tax value
Recoupment — section 8 (4) (a)
R 22 500 13 500 36 000
R 45 000
(36 000) 9 000 40 000 (9 000) 31 000
PART 4: OTHER PROVISIONS
7. The law — sections 11D (11), (12), (13), (14). (15), (16), (17) and (18)
(11) In respect of each year of assessment during which any taxpayer is eligible for any deduction contemplated in subsection (1) or (2), whether or not that deduction is limited in terms of this section, that taxpayer must submit to the Minister of Science and Technology such information as that Minister may require in such form and manner (including electronically) and at such place and within such time as that Minister may from time to time prescribe.
(12) The Minister of Science and Technology shall annually and in anonymous form submit to Parliament a report advising Parliament of the direct bene ts of the activities contemplated in subsection (1) in terms of economic growth, employment and other broader government objectives and the aggregate expenditure in respect of such activities.
(13) Other than as may be required by subsection (12), the Minister of Science and Technology and every person employed or engaged by him or her in carrying out the provisions of this section shall preserve and aid in preserving secrecy with regard to all matters that may come to his or her knowledge in the performance of his or her duties in connection with those provisions, and shall not communicate any such matter to any person whatsoever other than the Commissioner or the taxpayer concerned or his or her lawful representative nor suffer or permit any such person to have access to any records in the possession of that Minister or person except in the performance of his or her duties as required by the laws of the Republic or by order of a competent court.
(14) Every person employed or engaged as contemplated in subsection (13) shall, before acting under this section, take and subscribe before a magistrate or justice of the peace or a commissioner of oaths, such oath or solemn declaration, as the case may be, of delity or secrecy as may be prescribed as contemplated in section 4 (2) (a).
(15) The provisions of subsection (13) shall not apply in respect of information relating to any person, where that person has consented in writing that such information may be published or made known to any other person.
(16) Any person who contravenes the provisions of subsection (11) shall be guilty of an offence and liable on conviction to a ne or to imprisonment for a period not exceeding 24 months and any person who has been so convicted shall, if he or she fails within any period deemed by the Minister of Science and Technology to be reasonable and of which notice has been given to him or her by that Minister, to submit the information in respect of which the offence was committed, be guilty of an offence and liable on conviction to a ne of R50 for each day during which such default continues or to imprisonment without the option of a ne for a period not exceeding 12 months.
(17) Any person who contravenes the provisions of subsection (13) shall be guilty of an offence and liable on conviction to a ne or to imprisonment for a period not exceeding 24 months.
(18) Any person employed or engaged as contemplated in subsection (13) who carries out any of the provisions of this section before he or she has taken the prescribed oath or solemn declaration shall be guilty of an offence and liable on conviction to a ne not exceeding R500.
8. Reporting requirements
8.1 Reporting by the taxpayer to the Minister of Science and Technology
Each year of assessment in which a taxpayer, claiming the 150% deduction or the 50:30:20 depreciation allowances, was eligible for a deduction (whether or not that deduction is limited under section 11D), information about the R&D project must be submitted to the Minister of Science and Technology in the form and manner (including electronically) and at the place as the Minister may from time to time prescribe.
Further information about the reporting requirements can be obtained directly from the Department of Science and Technology’s website. www.dst.gov.za.
8.2 Reports from the Minister of Science and Technology to Parliament
The Minister of Science and Technology must annually report to Parliament about the direct bene ts for the activities in section 11D (1) in terms of—
• economic growth;
474
saIT comPendIum oF Tax LegIsLaTIon VoLume 2