Page 129 - SAIT Compendium 2016 Volume1

s 11D INCOME TAX ACT 58 OF 1962 s 11D
(5A) ...
[Sub-s. (5A) inserted by s. 13 (1) (d) of Act 8 of 2007, substituted by s. 19 (1) (d) of Act 35 of 2007 and omitted by s. 32 (1) of Act 24 of 2011 – commencement date: 1 October 2012. See also footnote at sub-s. (10).]
(5B) . . .
[Sub-s. (5B) inserted by s. 13 (1) (d) of Act 8 of 2007, substituted by s. 19 (1) (e) of Act 35 of 2007 and omitted by s. 32 (1) of Act 24 of 2011 – commencement date: 1 October 2012. See also footnote at sub-s. (10).]
(6) For the purposes of subsections (2) and (4)—
(a) a person carries on research and development if that person may determine or alter the methodology of the
research;
(b) notwithstanding paragraph (a), certain categories of
research and development designated by the Minister by notice in the Gazette* are deemed to constitute the carrying on of research and development.
[Para. (b) substituted by s. 18 (1) (g) of Act 43 of 2014 – date of commencement deemed to have been 1 October 2012; the substitution applies iro expenditure incurred iro research and development on or after that date, but before 1 October 2022.]
[Sub-s. (6) substituted by s. 13 (1) (e) of Act 8 of 2007, by s. 32 (1) of Act 24 of 2011 and by s. 29 (1) (e) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted subsection applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
(7) Where any amount is received by or accrues to a taxpayer from—
(a) a department of the Government of the Republic in
the national, provincial or local sphere;
(b) a public entity that is listed in Schedule 2 or 3 to the
Public Finance Management Act; or
(c) a municipal entity as de ned in section 1 of the Local
Government: Municipal Systems Act, 2000 (Act 32
of 2000),
to fund expenditure in respect of any research and development, an amount equal to the amount that is funded must not be taken into account for purposes of the deduction under subsection (2) or (4).
[Sub-s. (7) substituted by s. 11 (d) of Act 3 of 2008, by s. 32 (1) of Act 24 of 2011 and by s. 29 (1) (f) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted subsection applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
(8) . . .
[Sub-s. (8) substituted by s. 32 (1) of Act 24 of 2011 and deleted by s. 29 (1) (g) of Act 31 of 2013 – date of commencement: 1 January 2014; the deletion applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
(9) The Minister of Science and Technology or a person appointed by the Minister of Science and Technology must approve any research and development being carried on or funded for the purposes of subsections (2) and (4) having regard to—
[Words preceding para. (a) substituted by s. 29 (1) (h) of Act 31 of 2013 – date of commencement: 1 January 2014; the substitution applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
(a) whether the taxpayer has proved to the committee that the research and development in respect of which the approval is sought complies with the criteria contemplated in the de nition of ‘research and development’ in subsection (1); and
[Para. (b) substituted by s. 29 (1) (i) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted paragraph applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
(b) . . .
[Para. (b) deleted by s. 29 (1) (j) of Act 31 of 2013 – date of
commencement: 1 January 2014; the deletion applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
(c) such other criteria as the Minister of Finance in consultation with the Minister of Science and Technology may prescribe by regulation.
[Para. (c) substituted by s. 29 (1) (k) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted paragraph applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
[Sub-s. (9) substituted by s. 13 (1) of Act 8 of 2007 and by s. 32 (1) of Act 24 of 2011 – commencement date:
1 October 2012. See also footnote at sub-s. (10).]
(10) If research and development is approved under subsection (9) and—
(a) any material fact changes which would have had the
effect that approval under subsection (9) would not have been granted had that fact been known to the Minister of Science and Technology at the time of granting approval;
(b) the taxpayer carrying on that research and development fails to submit a report to the committee as required by subsection 13; or
(c) the taxpayer carrying on that research and development is guilty of fraud, or misrepresentation or non-disclosure of material facts which would have had the effect that approval under subsection (9) would not have been granted,
[Para. (c) added by s. 29 (1) (h) of Act 31 of 2013 – date of commencement: 1 January 2014; the added para. applies in respect of expenditure incurred in respect of research and development on or after that date, but before 1 October 2022.]
the Minister of Science and Technology may, after taking into account the recommendations of the committee, withdraw the approval granted in respect of that research and development with effect from a date speci ed by that Minister.
[Sub-s. (10) substituted by s. 32 (1) of Act 24 of 2011 – commencement date: 1 October 2012†.]
* Creating or developing a multisource pharmaceutical product and conducting a clinical trial deemed to constitute the carrying on of research and development—see GN R343 in GG 38729 of 23 April 2015.
† The substitution of sub-ss. (1) to (10) by s. 32 (1) of Act 24 of 2011 came into operation on 1 October 2012 and applies in respect of expenditure incurred in respect of research and development on or after 1 October 2012 but before 1 October 2022 (date of commencement substituted by s. 168 (1) of Act 22 of 2012).
SAIT CompendIum oF TAx LegISLATIon VoLume 1 121
INCOME TAX ACT – SECTIONS