Page 127 - SAIT Compendium 2016 Volume1

s 11 INCOME TAX ACT 58 OF 1962 s 11D
applies in respect of premiums payable
under that policy; or
(B) before 1 March 2012, it is stated in
an addendum to the policy agreement by no later than 31 August 2012 that this paragraph applies in respect of premiums payable under that policy;
[Para. (w) substituted by s. 14 (1) (i) of Act 89 of 1969 and by s. 10 (b) of Act 52 of 1970, amended by s. 10 (1) (d) of Act 88 of 1971, by s. 7 (1) (f) and (g) of Act 91 of 1982, by s. 10 (1) (t) and (u) of Act 94 of 1983, by s. 46 of Act 97 of 1986, by s. 22 (1) (d) and (e) of Act 30 of 2000 and by s. 19 (1) (b) of Act 74 of 2002 and substituted by s. 30 (1) (d) of Act 24 of 2011 – commencement date: 1 March 2012. This paragraph applies in respect of premiums incurred on or after that date.]
(x) any amounts which in terms of any other provision in this Part, are allowed to be deducted from the income of the taxpayer.
[S. 11 amended by s. 15 (a) of Act 59 of 2000.]
11A Deductions in respect of expenditure and losses incurred prior to commencement of trade
(1) For purposes of determining the taxable income derived during any year of assessment by a person from carrying on any trade, there shall be allowed as a deduction from the income so derived, any expenditure and losses—
(a) actually incurred by that person prior to the commencement of and in preparation for carrying on that trade;
(b) which would have been allowed as a deduction in terms of section 11 (other than section 11 (x)), 11B, 11D or 24J, had the expenditure or losses been incurred after that person commenced carrying on that trade; and
[Para. (b) substituted by s. 12 (1) of Act 8 of 2007 and by s. 15 (1) of Act 17 of 2009.]
(c) which were not allowed as a deduction in that year or any previous year of assessment.
(2) So much of the expenditure and losses contemplated in subsection (1) as exceeds the income derived during the year of assessment from carrying on that trade after deduction of any amounts allowable in that year of assessment in terms of any other provision of this Act, shall not be set off against any income of that person which is derived otherwise than from carrying on that trade, notwithstanding section 20 (1) (b).
[S. 11A inserted by s. 28 (1) of Act 45 of 2003.]
11B . . .
[S. 11B inserted by s. 29 of Act 45 of 2003, amended by s. 17 (1) (b) and (c) of Act 32 of 2004 and by s. 12 (a) and (b) of Act 20 of 2006 and repealed by s. 28 of Act 31 of 2013 – date of commencement: 12 December 2013.]
11C . . .
[S. 11C inserted by s. 18 (1) of Act 32 of 2004 and repealed by s. 31 (1) of Act 24 of 2011 – commencement date: 1 April 2012.]
11D Deductions in respect of scienti c or technological research and development
(1) For the purposes of this section ‘research and development’ means systematic investigative or systematic experimental activities of which the result is uncertain for the purpose of—
(a) discovering non-obvious scienti c or technological knowledge;
(b)
creating or developing—
(i) an invention as de ned in section 2 of the Patents
Act;
(ii) a functional design—
(aa) as de ned in section 1 of the Designs Act, capable of qualifying for registration under section 14 of that Act; and
(bb) that is innovative in respect of the func- tional characteristics or intended uses of that functional design;
[Sub-para. (ii) substituted by s. 18 (1) (a) of Act 43 of 2014 – date of commencement: 1 January 2015; the substitution applies iro expenditure incurred iro research and development on or after that date, but before 1 October 2022.]
(c)
(d)
(iii) a computer program as de ned in section 1 of the Copyright Act which is of an innovative nature; or
(iv) knowledge essential to the use of such inven- tion, functional design or computer program other than creating or developing operating manuals or instruction manuals or documents of a similar nature intended to be utilised in respect of that invention, functional design or computer program subsequent to the research and development being completed; or
making a signi cant and innovative improvement to any invention, functional design, computer program or knowledge contemplated in paragraph (a) or (b) for the purposes of—
(i) new or improved function; (ii) improvement of performance; (iii) improvement of reliability; or
(iv) improvement of quality,
of that invention, functional design, computer program or knowledge;
creating or developing a multisource pharmaceutical product, as de ned in the World Health Organisation Technical Report Series, No. 937, 2006 Annex 7 Multisource (generic) pharmaceutical products: guidelines on registration requirements to establish interchangeability issued by the World Health Organisation, conforming to such requirements as must be prescribed by regulations made by the Minister after consultation with the Minister for Science and Technology; or
[Para. (d) added by s. 18 (1) (c) of Act 43 of 2014 – date of commencement deemed to have been 1 October 2012; the paragraph applies iro expenditure incurred iro research and development on or after that date, but before
1 October 2022.]
(e) conducting a clinical trial as de ned in Appendix F of the Guidelines for good practice in the conduct of clinical trials with human participants in South Africa issued by the Department of Health (2006), conforming to such requirements as must be prescribed by regulations made by the Minister after consultation with the Minister for Science and Technology:
[Para. (e) added by s. 18 (1) (c) of Act 43 of 2014 – date of commencement deemed to have been 1 October 2012; the paragraph applies iro expenditure incurred iro research and development on or after that date, but before
1 October 2022.]
Provided that for the purposes of this de nition, research and development does not include activities for the purpose of—
(a)
routine testing, analysis, collection of information or quality control in the normal course of business;
SAIT CompendIum oF TAx LegISLATIon VoLume 1
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INCOME TAX ACT – SECTIONS