Page 143 - SAIT Compendium 2016 Volume1

s 12I INCOME TAX ACT 58 OF 1962 s 12I
Pendlex (to come into operation on the date on which the Special Economic Zones Act 16 of 2014 comes into operation)
(ii) 75 per cent of the cost of any new and unused manufacturing asset used in any industrial policy project other than an industrial policy project with preferred status that is located within a special economic zone,
[Para. (b) substituted by s. 24 (1) (b) of Act 17 of 2009 and by s. 37 (1) (b) of Act 24 of 2011 – date of commencement: 1 January 2012. This substituted paragraph applies in respect of projects approved on or after that date.]
in the year of assessment during which that asset is rst brought into use by the company as owner thereof for the furtherance of the industrial policy project carried on by that company, if that asset was acquired and contracted for on or after the date of approval and was brought into use within four years from the date of approval.
[Sub-s. (2) amended by s. 37 (1) (c) of Act 24 of 2011 – date of commencement deemed to have been 5 January 2009. This amended subsection applies in respect of projects approved on or after that date.]
(3) The additional investment allowance contemplated in subsection (2) may not exceed—
(a) R900 million in the case of any green eld project
with preferred status, or R550 million in the case of
any other green eld project from the date of approval;
[Para. (a) substituted by s. 28 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 January 2012; this substituted paragraph applies in respect of industrial policy projects approved on or after that date]
(b) R550 million in the case of any brown eld project with preferred status, or R350 million in the case of any other brown eld project from the date of approval.
[Para. (b) substituted by s. 28 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 January 2012; this substituted paragraph applies in respect of industrial policy projects approved on or after that date.]
(4) In addition to any other deductions allowable in terms of this Act, a company may, subject to subsection (5), deduct an amount (hereinafter referred to as an additional training allowance) equal to the cost of training provided to employees in the year of assessment during which the cost of training is incurred for the furtherance of the industrial policy project carried on by that company.
(5) (a) The cost of training contemplated in subsection (4) must be incurred by the end of the compliance period. (b) Notwithstanding subsection (2), there must be allowed to be deducted, not earlier than the year of assessment preceding the year in which the asset is brought into use, any amount in respect of the additional
training allowance.
(c) The additional training allowance contemplated
in subsection (4) allowed to a company may not exceed R36 000 per employee.
(d) The additional training allowance contemplated in subsection (4) allowed to a company at the end of the compliance period from the date of approval may not exceed—
(i) R30 million in the case of an industrial policy project with preferred status; and
(ii) R20 million in the case of any other industrial policy project.
[Sub-s. (5) substituted by s. 22 (1) (b) of Taxation Laws Amendment Act, 2015 – date of commencement:
1 January 2016.]
(6) (a) Where a taxpayer is allowed a deduction in terms of subsection (2) in the current or any previous year of assessment, any balance of assessed loss carried forward by the taxpayer during a year of assessment must be increased by the amount by which that balance of assessed loss exceeds an amount equal to any balance of assessed loss that would have been carried forward during that year had that deduction not been allowed, multiplied by the rate contemplated in paragraph (a) of the de nition of ‘prescribed rate’ as at the end of the year of assessment.
(b) Paragraph (a) does not apply in respect of any balance of assessed loss incurred by a taxpayer during any year of assessment more than four years after the year during which the approval contemplated in subsection (8) is granted.
(7) An industrial project of a company constitutes an industrial policy project if—
(a) the Minister of Trade and Industry, after taking into
account the recommendations of the adjudication committee, is satis ed that—
(i) the cost of all manufacturing assets to be acquired by the company for the purposes of the project will exceed—
(aa) in the case of green eld projects, R50
million; and
[Item (aa) substituted by s. 22 (1) (e) of Act 43 of 2014 – date of commencement: 1 January 2015.]
(bb) in the case of brown eld projects, the higher of—
(A) R30 million; or
(B) the lesser of R50 million or 25 per
cent of the expenditure incurred to acquire assets previously used in the project;
[Subitem (B) substituted by s. 22 (1) (f) of Act 43 of 2014 – date of commencement: 1 January 2015.]
(ii) the project does not constitute an industrial participation project and does not receive any concurrent industrial incentive provided by any national sphere of government; and
(iii) the project is not integrally related to any other project of the company (or any other company that forms part of the same group of companies as that company) that has been approved as contemplated in subsection (8);
[Sub-para. (iii) substituted by s. 24 (1) (c) of Act 17 of 2009.]
(iv) . . .
[Sub-para. (iv) deleted by s. 22 (1) (c) of Taxation Laws Amendment Act, 2015 – date of commencement deemed to have been 8 January 2009.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1
135
Prelex
Wording of sub-s. (5) in force until 1 January 2016
(5) (a) The cost of training contemplated in subsection (4) must be incurred within six years from the date of approval, and the additional training allowance contemplated in subsection (4) allowed to a company may not exceed R36 000 per employee.
(b) The additional training allowance contemplated in subsection (4) allowed to a company within the six-year period from the date of approval may not exceed—
(i) R30 million in the case of an industrial policy project with preferred status; and
(ii) R20 million in the case of any other industrial policy project.
INCOME TAX ACT – SECTIONS