Page 116 - SAIT Compendium 2016 Volume1

s 11 INCOME TAX ACT 58 OF 1962 s 11
(a) expenditure and losses actually incurred in the production of the income, provided such expenditure and losses are not of a capital nature;
[Para. (a) substituted by s. 15 (a) of Act 59 of 2000.]
(b) . . .
[Para. (b) substituted by s. 13 (a) of Act 129 of 1991 and
deleted by s. 15 (b) of Act 59 of 2000.]
(bA) . . .
[Para. (bA) inserted by s. 9 (1) (a) of Act 96 of 1981,
substituted by s. 10 (1) (a) of Act 19 of 2001 and deleted
by s. 30 (1) (a) of Act 24 of 2011 – commencement date: 1 January 2012. This deletion applies in respect of years of assessment commencing on or after that date.]
(bB). . .
[Para. (bB) inserted by s. 11 (1) (a) of Act 121 of 1984,
amended by s 8 (1) (a) of Act 90 of 1988, by s. 8 (1) (a) of Act 70 of 1989 and by s. 12 (1) (a) of Act 21 of 1995 and deleted by s. 14 (1) (a) of Act 17 of 2009.]
(bC) . . .
[Para. (bC) inserted by s. 27 (1) (a) of Act 45 of 2003 and
deleted by s. 16 (1) (a) of Act 32 of 2004.]
(c) any legal expenses (being fees for the services of legal practitioners, expenses incurred in procuring evidence or expert advice, court fees, witness fees and expenses, taxing fees, the fees and expenses of sheriffs or messengers of court and other expenses of litigation which are of an essentially similar nature to any of the said fees or expenses) actually incurred by the taxpayer during the year of assessment in respect of any claim, dispute or action at law arising in the course of or by reason of the ordinary operations undertaken by him in the carrying on of his trade: Provided that the amount to be allowed under this paragraph in respect of any such expenses shall be limited to so much thereof as—
(i) is not of a capital nature; and
(ii) is not incurred in respect of any claim made
against the taxpayer for the payment of damages or compensation if by reason of the nature of the claim or the circumstances any payment which is or might be made in satisfaction or settlement of the claim does not or would not rank for deduction from his income under paragraph (a); and
[Sub-para. (ii) substituted by s. 18 (1) (a) of Act 60 of 2008.]
(iii) is not incurred in respect of any claim made by the taxpayer for the payment to him of any amount which does not or would not constitute
income of the taxpayer; and
(iv) is not incurred in respect of any dispute or action
at law relating to any such claim as is referred to
in paragraph (ii) or (iii) of this proviso;
[Para. (c) substituted by s. 10 (1) (a) of Act 88 of 1971.] (cA) an allowance in respect of any amount actually incurred by such person in the course of the carrying on of his trade, as compensation in respect of any restraint of trade imposed on any other person who—
(i) is a natural person;
(ii) is or was a labour broker as de ned in the Fourth
Schedule (other than a labour broker in respect of which a certi cate of exemption has been issued in terms of such Schedule);
[Sub-para. (ii) substituted by s. 18 (1) (b) of Act 60 of 2008.] (iii) was a personal service company or personal service trust as de ned in the Fourth Schedule prior to section 66 of the Revenue Laws Amendment Act, 2008, coming into operation; or
[Sub-para. (iii) substituted by s. 18 (1) (b) of Act 60 of 2008.]
to the extent that such amount constitutes or will constitute income of the person to whom it is paid: Provided that the amount allowed to be deducted under this paragraph shall not exceed for any one year the lesser of—
(aa) so much of such amount so incurred as is equal to such amount divided by the number of years, or part thereof, during which the restraint of trade shall apply; or
(bb) one-third of such amount so incurred;
[Para. (cA) inserted by s. 22 (1) (a) of Act 30 of 2000.]
(d) expenditure actually incurred during the year of assessment on repairs of property occupied for the purpose of trade or in respect of which income is receivable, including any expenditure so incurred on the treatment against attack by beetles of any timber forming part of such property and sums expended for the repair of machinery, implements, utensils and other articles employed by the taxpayer for the purposes of his trade;
(e) save as provided in paragraph 12 (2) of the First Schedule, such sum as the Commissioner may think just and reasonable as representing the amount by which the value of any machinery, plant, implements, utensils and articles (other than machinery, plant, implements, utensils and articles in respect of which a deduction may be granted under section 12B, 12C, 12DA, 12E (1) or 37B) owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the de nition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and used by the taxpayer for the purpose of his or her trade has been diminished by reason of wear and tear or depreciation during the year of assessment: Provided that—
[Words in para. (e) preceding the proviso substituted by s. 27 (1) (a) of Act 31 of 2013 – date of commencement: 12 December 2013.]
[NB: Words in para. (e) preceding the proviso to that paragraph have been substituted by s. 18 (1) (a) of Taxation Laws Amendment Act, 2015, a provision that is to come into operation on a date to be determined by the Minister of Finance in the Gazette. See Pendlex below.]
Pendlex iro words in para. (e) preceding the proviso (to come into operation on a date to be determined by the Minister of Finance in the Gazette)
(e) save as provided in paragraph 12 (2) of the First
Schedule, such sum as represents the amount by which the value of any machinery, plant, implements, utensils and articles (other than machinery, plant, implements, utensils and articles in respect of which a deduction may be granted under section 12B, 12C, 12DA, 12E (1) or 37B) owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the de nition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and used by the taxpayer for the purpose of his or her trade has been diminished by reason of wear and tear or depreciation during the year of assessment, which amount must be determined on the basis of the periods of use listed for this purpose in a public notice issued by the Commissioner, or a shorter period of use approved by the Commissioner on application in the prescribed form and manner by the taxpayer: Provided that—
(iv) is a personal service provider as de ned in the Fourth Schedule,
(i) . . .
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[Para. (i) deleted by s. 19 (1) (b) of Act 7 of 2010.] SAIT CompendIum oF TAx LegISLATIon VoLume 1