Page 115 - SAIT Compendium 2016 Volume1

s 10B INCOME TAX ACT 58 OF 1962 s 11
(A) a person other than a natural person, deceased estate, insolvent estate or trust; or
(B) an insurer in respect of its company policyholder fund, corporate fund and risk policy fund,
[Subitem (B) substituted by s. 15 (1) of Act 43 of 2014 – date of commencement: 1 January 2016.]
the ratio of the number 13 to the number 28;
or
(cc) where the person is an insurer in respect of
its individual policyholder fund, the ratio of
the number 15 to the number 30; and
[Sub-para. (ii) amended by s. 4 (1) of Act 13 of 2012 (date of commencement deemed to have been 1 April 2012) and substituted by s. 20 (1) (d) of Act 22 of 2012 – see sub-s. (2) (b) above for particulars relating to the coming into operation of s. 20 (1).]
(iii) ‘C’ represents the aggregate of any foreign dividends received by or accrued to the person during a year of assessment that is not exempt from normal tax in terms of subsection (2).
(4) Subsections (2) (a) and (2) (b) do not apply in respect of any foreign dividend received by or accrued to any person—
(a) if—
(i) (aa) any amount of that foreign dividend is determined directly or indirectly with reference to; or
(bb)that foreign dividend arises directly or indirectly from,
any amount paid or payable by any person to any
other person; and
[Words following item (bb) substituted by s. 20 (1) (e) of Act 22 of 2012 – see sub-s. (2) (b) above for particulars relating to the coming into operation of s. 20 (1).]
(ii) the amount so paid or payable is deductible from the income of the person by whom it is paid or payable and—
(aa) is not subject to normal tax in the hands
of the other person contemplated in
subparagraph (i); and
(bb)where that other person contemplated in
subparagraph (i) is a controlled foreign company, is not taken into account in determining the net income, contemplated in section 9D (2A), of that controlled foreign company,
unless the amount so paid or payable is paid or payable as consideration for the purchase of trading stock by the person by whom the amount is paid or payable; or
[Sub-para. (ii) substituted by s. 20 (1) (f) of Act 22 of 2012 – see sub-s. (2) (b) above for particulars relating to the coming into operation of s. 20 (1).]
(b) from any portfolio contemplated in paragraph (e) (ii) of the de nition of ‘company’ in section 1.
(5) The exemptions from tax provided by subsection (2) do not extend to any payments out of any foreign dividend received by or accrued to any person.
[Sub-s. (5) substituted by s. 20 (1) (g) of Act 22 of 2012 – see sub-s. (2) (b) above for particulars relating to the coming into operation of s. 20 (1).]
(6) Subsections (2) and (3) do not apply to any foreign dividend received by or accrued to a person in respect of services rendered or to be rendered or in respect of or by virtue of employment or the holding of any of ce, other than a foreign dividend received or accrued in respect of a restricted equity instrument as de ned in section 8C held by that person or in respect of a share held by that person.
[Sub-s. (6) added by s. 25 (1) (e) of Act 31 of 2013 – date
of commencement: 1 March 2014; the added subsection applies in respect of foreign dividends received or accrued on or after that date.]
[S. 10B inserted by s. 29 (1) of Act 24 of 2011 –
commencement date: (a) insofar as it applies to any person that is a natural person, deceased estate, insolvent estate or trust, on 1 March 2012 and applies in respect of dividends and foreign dividends received or accrued on or after that date; and (b) insofar as it applies to any person that is a person other than a natural person, deceased estate, insolvent estate or trust, on 1 April 2012 and applies in respect of dividends and foreign dividends received or accrued on or after that date.]
10C Exemption of non-deductible element of compulsory annuities
(1) For the purposes of this section—
‘compulsory annuity’ means the amount of the remainder of the retirement interest of a person payable in the form of an annuity as contemplated in—
(a) paragraph (ii) (dd) of the proviso to paragraph (c) of
the de nition of ‘pension fund’;
(b) paragraph (e) of the proviso to the de nition of
‘pension preservation fund’;
(c) paragraph (b) (ii) of the proviso to the de nition of
‘retirement annuity fund’; or
(d) paragraph (e) of the de nition of ‘provident
preservation fund’.
[Para. (d) added by s. 16 (1) of Act 43 of 2014 – date of commencement: 1 March 2016; the paragraph ‘applies iro amounts received on or after that date’ (quoted text inserted by s. 150 (1) of Taxation Laws Amendment Act, 2015).]
(2) There shall be exempt from normal tax in respect of the aggregate of compulsory annuities payable to a person an amount equal to so much of the person’s own contributions to any pension fund, provident fund and retirement annuity fund that did not rank for a deduction against the person’s income in terms of section 11 (k) as has not previously been—
[Words in sub-s. (2) preceding para. (a) substituted by s. 26 (1) of Act 31 of 2013 (‘11 (k) or (n)’ replaced by ‘11 (k)’) – date of commencement: 1 March 2016 (‘1 March 2015’ replaced by ‘1 March 2016’ by s. 121 (1) of Act 43 of 2014) (see also s. 157 (1) of Taxation Laws Amendment Act, 2015); the substitution is to apply iro contributions made during years of assessment commencing on or after that date.]
Prelex (wording of subitem (B) in force until 1 January
2016)
(B) an insurer in respect of its company policyholder fund and corporate fund,
(a)
(b)
allowed to the person as a deduction in terms of the Second Schedule; or
exempted from normal tax in terms of this section,
in respect of any year of assessment.
[S. 10C inserted by s. 21 (1) of Act 22 of 2012 – date of commencement: 1 March 2014; the inserted section applies in respect of amounts received or accrued on or after that date.]
11 General deductions allowed in determination of taxable income
For the purpose of determining the taxable income derived by any person from carrying on any trade, thereshall be allowed as deductions from the income of such person so derived—
SAIT CompendIum oF TAx LegISLATIon VoLume 1 107
INCOME TAX ACT – SECTIONS