Page 136 - SAIT Compendium 2016 Volume1

s 12C INCOME TAX ACT 58 OF 1962 s 12D
(b) the useful life of the foundation or supporting structure is or will be limited to the useful life of the machinery, plant, implement, utensil, article or improvement mounted thereon or af xed thereto,
the foundation or supporting structure shall be deemed to be a part of the machinery, implement, utensil, article or improvement mounted thereon or af xed thereto.
[Sub-s. (1) amended by s. 13 (1) (c) of Act 21 of 1995, by
s. 10 (1) of Act 46 of 1996, by s. 15 of Act 30 of 2002, by s. 30 of Act 45 of 2003, by s. 20 (c), (d) and (e) of Act 31 of 2005, by s. 19 (b) of Act 17 of 2009 and by s. 33 (1) (d) of Act 24 of 2011 (the addition of the further proviso) – date of commencement: 10 January 2012.]
(2) For the purposes of this section the cost to a taxpayer of any asset shall be deemed to be the lesser of the actual cost to the taxpayer to acquire that asset or the cost which a person would, if he had acquired that asset under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition of that asset was in fact concluded, have incurred in respect of the direct cost of acquisition of the asset, including the direct cost of the installation or erection thereof or, where the asset has been acquired to replace an asset which has been damaged or destroyed, that cost less any amount which has been recovered or recouped in respect of the damaged or destroyed asset and has been excluded from the taxpayer’s income in terms of section 8 (4) (e), whether in the current or any previous year of assessment.
[Sub-s. (2) substituted by s. 20 (f) of Act 31 of 2005.] (3) No deduction shall be allowed under this section in
respect of—
(a) any asset which has been let by the taxpayer under
a lease other than an operating lease as de ned in section 23A (1), unless the lessee under such lease derives in the carrying on of his trade amounts constituting income for the purposes of this Act;
(b) . . .
[Para. (b) deleted by s. 32 (1) (e) of Act 31 of 2013 – date of
commencement: 12 December 2013.]
(c) any asset which has been disposed of by the taxpayer
during any previous year of assessment;
(d) any asset in respect of which an allowance has been
(5) The deductions which may be allowed or deemed to have been allowed in terms of this section and section 11 (o) in respect of any asset shall not in the aggregate exceed the cost to the taxpayer of such asset.
[Sub-s. (5) substituted by s. 18 (b) of Act 59 of 2000.] (6) Any expenditure (other than expenditure referred to in section 11 (a)) incurred by a taxpayer during any year of assessment in moving an asset in respect of which a deduction was allowed or is allowable under this section
or section 12B from one location to another shall—
(a) where the taxpayer is entitled to a deduction in respect of such asset under subsection (1) in that year and one or more succeeding years, be allowed to be deducted from his income in equal instalments in each year in
which such a deduction is allowable; or
(b) in any other case, be allowed to be deducted from his
income in that year.
[Sub-s. (6) deleted by s. 11 (1) of Act 113 of 1993 and added by s. 11 of Act 21 of 1994.]
[S. 12C inserted by s. 14 (1) of Act 101 of 1990 and amended by s. 20 (a) of Act 31 of 2005.]
12D Deduction in respect of certain pipelines, transmission lines and railway lines
(1) For the purposes of this section—
‘affected asset’ means any—
(a) pipeline used for the transportation of natural oil;
(aA) pipeline for the transportation of water used by power stations in the process of generating electricity;
[Para. (aA) inserted by s. 12 (a) of Act 3 of 2008.]
(b) line or cable used for the transmission of electricity; (c) line or cable used for the transmission of electronic
communications; and
[Para. (c) substituted by s. 20 (1) (a) of Act 17 of 2009.] (d) railway line used for the transportation of persons,
goods or things,
and includes any earthworks or supporting structures and equipment forming part of or ancillary to such pipeline, transmission line or cable or railway line and any improvement to such pipeline, transmission line or cable or railway line;
[Words following para. (d) substituted by s. 33 (1) of Act 31 of 2013 – date of commencement: 1 April 2014; the substituted words apply in respect of any pipeline, transmission line or cable or railway line rst brought into use on or after that date.]
[De nition of ‘affected asset’ amended by s. 23 (1) of Act 35 of 2007 and by s. 20 (1) of Act 17 of 2009.]
‘effective date’ . . .
[De nition of ‘effective date’ deleted by s. 23 (1) (b) of Act
35 of 2007.]
‘natural oil’ means any liquid or solid hydrocarbon or combustible gas existing in a natural condition in the earth’s crust and includes any re ned by-products of such liquid or solid hydrocarbon or combustible gas.
(2) There shall be allowed to be deducted an allowance in respect of the cost actually incurred by the taxpayer in respect of the acquisition of—
[Wording in sub-s. (2) preceding para. (a) substituted by s. 19 (1) (a) of Act 43 of 2014 – date of commencement: 1 April 2015; the substitution applies iro assets acquired on or after that date.]
(e)
granted to the taxpayer under section 12E; or
[Para. (d) added by s. 8 (c) of Act 9 of 2005.]
any asset the ownership of which is retained by the taxpayer as a seller 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.
[Para. (e) added by s. 20 (g) of Act 31 of 2005 and
substituted by s. 32 (1) (h) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(4) . . .
[Sub-s. (4) amended by s. 7 (1) of Act 140 of 1993 and by s. 13 (1) (d) of Act 21 of 1995 and deleted by s. 22 of Act 35 of 2007.]
(4A) Where any asset in respect of which any deduction is claimed in terms of this section was during any previous year of assessment used by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year, any deduction which could have been allowed in terms of this section during such previous year or any subsequent year that such asset was used by such taxpayer shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.
[Sub-s. (4A) inserted by s. 18 (a) of Act 59 of 2000 and substituted by s. 20 of Act 60 of 2008.]
(a)
(i) any new and unused affected asset; or
(ii) in the case of an asset contemplated in paragraph (c) of the de nition of ‘affected asset’ any asset, owned by the taxpayer that is brought into use for the
rst time by the taxpayer; and
[Para. (a) substituted by s. 23 (1) (d) of Act 35 of 2007, by s. 12 (b) of Act 3 of 2008 and by s. 19 (1) (b) of Act
128
SAIT CompendIum oF TAx LegISLATIon VoLume 1