Page 146 - SAIT Compendium 2016 Volume1

s 12I INCOME TAX ACT 58 OF 1962 s 12J
(a) may, after taking into account the recommendations of the adjudication committee, extend the periods contemplated in subsections (2) and (6) (b) by a period not exceeding one year;
(b) must provide written reasons for any decision to grant or deny any application for approval of an industrial project as an industrial policy project in terms of subsection (8), or for any withdrawal of approval as contemplated in subsection (12);
(c) must inform the Commissioner of the approval of any industrial project as an industrial policy project in terms of subsection (8), setting out such particulars as are required by the Commissioner to determine the amount of the additional investment allowance allowable in terms of this section;
(d) must publish the particulars of any application received from a company for approval of an industrial project as an industrial policy project in the Gazette not later than 30 days after providing to that company the written reasons for any decision as contemplated in paragraph (b);
(e) must submit an annual report to Parliament, and must provide a copy of that report to the Auditor-General, setting out the following information in respect of each company that received approval in terms of subsection (8):
(i) The name of each company;
(ii) the description of each industrial policy project;
(iii) the potential national revenue forgone by virtue of the deductions allowable in respect of that industrial policy project in terms of this section;
(iv) the annual progress relating to the direct bene ts of the industrial policy project in terms of economic growth or employment, setting out the details of the factors contemplated in subsections (7) and (8) on the basis of which approval of the industrial project as an industrial policy project was granted;
(v) any decision to withdraw the approval of an industrial policy project in terms of subsection (12); and
(vi) any decision not to withdraw the approval of an industrial policy project, despite any material change in facts.
[Sub-para. (vi) substituted by s. 37 (1) (e) of Act 24 of 2011 – date of commencement 1 January 2012: the substituted paragraph applies in respect of projects approved on or after that date.]
(20) . . .
[Sub-s. (20) deleted by s. 22 (1) (g) of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(21) Notwithstanding the provisions of Chapter 6 of the Tax Administration Act, the Commissioner must disclose to the Minister of Trade and Industry and the adjudication committee, including any person whose assistance has been obtained by that committee, such information relating to the affairs of any company carrying on an industrial policy project as is necessary to enable the Minister of Trade and
Industry and the adjudication committee to perform their functions in terms of this section.
[Sub-s. (21) substituted by s. 271 of Act 28 of 2011 – date of commencement: 1 October 2012.]
(22) Every employee of the Department of Trade and Industry and every member of the adjudication committee, including any person whose assistance has been obtained by that committee, must preserve and aid in preserving secrecy with regard to all matters that may come to their knowledge in the performance of their functions in terms of this section, and may not communicate any such matter to any person whatsoever other than to the company concerned or its legal representative, nor allow any such person to have access to any records in the possession or custody of that department or committee, except in terms of the law or an order of court.
(23) Any person who contravenes the provisions of subsections (18) and (22) is guilty of an offence and liable on conviction to a ne or to imprisonment for a period not exceeding two years.
(24) For the purposes of this section the cost to a taxpayer of any manufacturing asset is deemed to be the lesser of the actual cost to the taxpayer or the cost which a person would, if the person had acquired that manufacturing asset under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition was in fact concluded, have incurred in respect of the direct cost of the acquisition of the manufacturing asset.
[S. 12I inserted by s. 26 of Act 60 of 2008.]
12J Deductions in respect of expenditure incurred in exchange for issue of venture capital company shares
(1) For the purposes of this section—
‘impermissible trade’ means—
(a) any trade carried on in respect of immovable property,
other than a trade carried on as an hotel keeper;
(b) any trade carried on by a bank as de ned in the Banks Act, a long-term insurer as de ned in the Long-term Insurance Act, a short-term insurer as de ned in the Short-term Insurance Act and any trade carried on in respect of money-lending or hire-purchase nancing;
[Para. (b) substituted by s. 38 (1) (a) of Act 24 of 2011 and by s. 36 of Act 31 of 2013 – date of commencement: 12 December 2013.]
(c) any trade carried on in respect of nancial or advisory services, including trade in respect of legal services, tax advisory services, stock broking services, management consulting services, auditing or accounting services;
(d) any trade carried on in respect of gambling;
(e) any trade carried on in respect of liquor, tobacco,
arms or ammunition; or (f) .. .
[Para. (f) deleted by s. 38 (1) (b) of Act 24 of 2011 – date
of commencement 1 January 2012: the deletion applies in respect of years of assessment commencing on or after that date.]
(g) any trade carried on mainly outside the Republic; ‘junior mining company’ means any company that is solely carrying on a trade of mining exploration or production which is either an unlisted company as de ned in section 41 or
listed on the alternative exchange division of the JSE Limited; ‘qualifying company’ means any company if—
(a) that company is a resident;
(b) the company is not a controlled group company in
relation to a group of companies;
[Para. (b) substituted by s. 38 (1) (c) of Act 24 of 2011 – date of commencement 1 January 2012: the substituted paragraph applies in respect of years of assessment commencing on or after that date.]
Prelex
Wording of sub-s. (20) in force until date of promulgation of Taxation Laws Amendment Act, 2015
(20) The Commissioner must submit an annual report to the Auditor-General containing a list of all—
(a) certi cates issued under subsection (7) (b) (ii); and (b) failures to respond within 60 days as contemplated
in the proviso to subsection (7) (b) (ii).
138 SAIT CompendIum oF TAx LegISLATIon VoLume 1