Page 83 - SAIT Compendium 2016 Volume2

PN 37/1995 Income Tax acT: PracTIce noTes PN 42/1996
2. In the case of a pensioner whose nancial affairs (pensions, annuities, investment income, etc) are administered by a banking institution, board of executors or similar institution the administration fees, including any fees for the completion of tax returns, paid to the institution will qualify for deduction.
3. Only fees which were actually paid or are payable are deductible.
4. Since the rst R2000 of interest income is exempt from income tax, fees paid will only be allowed as a deduction
to the extent that they do not create a loss.
5. Where the taxpayer receives income from exempt interest, other interest and dividends, the fees will be allocated on
the income basis between the various sources of income.
PRACTICE NOTE 39 OF 1995 – DEDUCTION IN RESPECT OF WEAR AND TEAR OR DEPRECIATION IN TERMS OF SECTION 11 (e) OF THE INCOME TAX ACT: MACHINERY, PLANT, IMPLEMENTS, UTENSILS AND ARTICLES (EXCLUDING VEHICLE AND EQUIPMENT) (EXCLUDING LEASED ITEMS AS CONTEMPLATED IN PRACTICE NOTE 15 DATED 16 MARCH 1992)
General Notice 375 published in Government Gazette 16415 of 19 May 1995
Replaced by Interpretation Note 47 (issue 2) of 11 November 2009.
PRACTICE NOTE 40 OF 1995 – LUMP SUM BENEFITS DERIVED FROM A PENSION OR PROVIDENT
FUND ON RETIREMENT
General Notice 541 published in Government Gazette 16495 of 30 June 1995
Withdrawn* with effect from 1 February 2010. SARS comment: Incorporated in the Guide on the Taxation of Lump Sum Bene ts
PRACTICE NOTE 42 OF 1996 – PROCESSES OF MANUFACTURE, PROCESSES SIMILAR TO A PROCESS OF MANUFACTURE AND PROCESSES NOT REGARDED AS PROCESSES OF MANUFACTURE OR PROCESSES SIMILAR TO A PROCESS OF MANUFACTURE
issued by
OFFICE OF THE COMMISSIONER FOR INLAND REVENUE General Notice 244 published in Government Gazette 17017 of 8 March 1996
1. The attached Annexure A contains a list of processes which have been accepted as processes similar to a process of manufacture.
2. Annexure B contains a list of processes which have been accepted as ‘direct’ manufacturing processes. As such processes do not require any speci c approval, the list is not exhaustive.
3. Annexure C contains a list of ‘processes’ which are considered not to be direct processes of manufacture or processes similar to a process of manufacture. The list is, however, not exhaustive.
ANNEXURE A
PROCESSES SIMILAR TO A PROCESS OF MANUFACTURE
1. The construction of piles on site by means of the digging of holes and the casting of concrete pillars. (The manufacture
or pre-casting of piles other than on site, is however, regarded as a process of manufacture.)
2. Dry-cleaning.
3. Laundering.
4. Construction of buildings, including plumbing and sewerage.
5. Construction of roads.
6. Production of cold air for refrigeration purposes.
7. Earthmoving, including the removal of spoil which results from the excavation work.
8. Shoe repairing.
9. Photography.
10. Panel beating and spray painting.
11. Dyeing.
12. Packing and pressing of wool.
13. Re-conditioning of oil and other drums.
14. Machining and fabrication of auto electrical parts.
15. Printing of maps by photogrammatic and cartographic processes.
16. Preparation of shredded paper for packing purposes.
17. Pressure impregnation and creosote treatment of timber.
18. Filming and processing of motion pictures.
19. Generation and transformation of electricity. (It should be noted that the allowance is only in respect of equipment
where it is situated on the premises on which a manufacturing or similar process is carried on.)
20. The liquefaction of eggs.
21. Erection of structures and installation of machinery, involving the use of heavy mobile cranes.
* http://www.sars.gov.za/home.asp?pid=5627. For access to the Guide on the Taxation of Lump Sum Bene ts, see http://www.sars.gov.za/home.asp?pid=54773.
SAIT CompendIum oF TAx LegISLATIon VoLume 2 75