Page 137 - SAIT Compendium 2016 Volume1

s 12D INCOME TAX ACT 58 OF 1962 s 12DA
43 of 2014 – date of commencement: 1 April 2015; the substituted paragraph applies iro assets acquired on or after that date.]
(b) the asset as contemplated in paragraph (a) which is used directly by such taxpayer for purposes contemplated in the de nition of ‘affected asset’,
[Para. (b) substituted by s. 12 (b) of Act 3 of 2008 and s. 19 (1) (b) of Act 43 of 2014 – date of commencement:
1 April 2015; the substituted paragraph applies iro assets acquired on or after that date.]
to the extent that such affected asset is used in the production of his income.
[Sub-s. (2) substituted by s. 19 (1) (a) of Act 59 of 2000 and by s. 28 (1) of Act 60 of 2001 and amended by s. 16 (1) of Act 30 of 2002, by s. 23 (1) (c) and (e) of Act 35 of 2007 and by s. 20 (1) (c) of Act 17 of 2009.]
(2A) For the purposes of this section, if a taxpayer completes an improvement as contemplated in section 12N, the expenditure incurred by the taxpayer to complete that improvement shall be deemed to be the cost actually incurred by the taxpayer in respect of the acquisition of any new and unused affected asset contemplated in subsection (2).
[Sub-s. (2A) inserted by s. 22 (1) of Act 7 of 2010.]
(3) The allowance contemplated in subsection (2) shall not for any one year exceed—
(a) 10 per cent of the cost incurred in respect of any asset
contemplated in paragraph (a) of the de nition of
‘affected asset’;
(b) 5 per cent of the cost incurred in respect of any asset
contemplated in paragraph (aA), (b) or (d) of the
de nition of affected asset; or
[Para. (b) substituted by s. 12 (c) of Act 3 of 2008 and by s. 19 (1) (d) of Act 43 of 2014 – date of commencement: 1 April 2015; the substituted paragraph applies iro assets acquired on or after that date.]
(c) 6.67 per cent of the cost incurred in respect of any asset contemplated in paragraph (c) of the de nition of ‘affected asset’.
[Para. (c) added by s. 19 (1) (e) of Act 43 of 2014 – date of commencement: 1 April 2015; the paragraph applies iro assets acquired on or after that date.]
(3A) Where any affected 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 in which 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. (3A) inserted by s. 19 (b) of Act 59 of 2000 and substituted by s. 21 of Act 60 of 2008.]
(4) For the purposes of this section the cost to a taxpayer of any affected asset shall be deemed to be—
(a) where such asset has been acquired to replace any
asset which has been damaged or destroyed, the actual cost of such asset, less any amount which has been recovered or recouped in respect of the damaged or destroyed asset which 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; or
(i) the actual cost of the asset incurred by the taxpayer; or
[Sub-para. (i) substituted by s. 23 (1) (f) of Act 35 of 2007.] (ii) the cost which the taxpayer would, if the taxpayer had acquired or improved the said asset under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition or improvement of the said asset was in fact concluded, have incurred in respect of the direct cost of acquisition or improvement of the asset (including the direct cost of the installation or
erection thereof).
[Sub-para. (ii) substituted by s. 23 (1) (f) of Act 35 of 2007.] (5) No deduction shall be allowed under this section in respect of any affected asset which has been disposed of
by the taxpayer during any previous year of assessment. (6) The deductions which may be allowed or deemed to have been allowed in terms of this section and any other provision of this Act in respect of the cost of any affected asset shall not in the aggregate exceed the amount of such
cost.
[Sub-s. (6) substituted by s. 19 (c) of Act 59 of 2000.] [S. 12D inserted by s. 23 (1) of Act 30 of 2000.]
12DA Deduction in respect of rolling stock
(1) There shall be allowed to be deducted from the income of the taxpayer an allowance in respect of the cost actually incurred by the taxpayer in respect of the acquisition or improvement of any rolling stock which is 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 is used directly by the taxpayer wholly or mainly for the transportation of persons, goods or things to the extent that such rolling stock is used in the production of that taxpayer’s income.
[Sub-s. (1) substituted by s. 34 of Act 31 of 2013 – date of commencement: 12 December 2013.]
(2) The allowance contemplated in subsection (1) shall, in respect of any one year of assessment, be 20 per cent of the cost incurred in respect of any rolling stock.
(3) For the purposes of this section the cost to a taxpayer of any rolling stock shall be deemed to be the lesser of the actual cost to the taxpayer or the cost which a person would, if that person had acquired or improved the rolling stock under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition or improvement of the rolling stock was in fact concluded, have incurred in respect of the direct cost of the acquisition or improvement of the rolling stock or, where the rolling stock has been acquired to replace rolling stock which has been damaged or destroyed, such cost less any amount which has been recovered or recouped in respect of the damaged or destroyed rolling stock 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.
(4) Where any rolling stock 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 year or any subsequent year in which such asset was used by the taxpayer shall for the purposes of this section be deemed to have been allowed during such
(b) in any other case, the lesser of—
SAIT CompendIum oF TAx LegISLATIon VoLume 1 129
INCOME TAX ACT – SECTIONS