Page 153 - SAIT Compendium 2016 Volume1

s 12Q INCOME TAX ACT 58 OF 1962
‘international shipping income’ means the receipts and accruals of a person derived from international shipping;
‘South African ship’ means a ship which is registered in the Republic in accordance with Part 1 of Chapter 4 of the Ship Registration Act, 1998 (Act 58 of 1998).
[De nition of ‘South African ship’ substituted by s.
27 of Taxation Laws Amendment Act, 2015 (‘section 15’ replaced by ‘Part 1 of Chapter 4’) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(2) (a) There must be exempt from normal tax any international shipping income of any international shipping company.
(b) Any capital gain or capital loss in respect of any year of assessment of any international shipping company determined in respect of a South African ship engaged in international shipping must be disregarded in determining the aggregate capital gain or aggregate capital loss of that international shipping company.
(3) The rate of dividends tax contemplated in section 64E that is paid by an international shipping company on the amount of any dividend derived from international shipping income must not exceed zero per cent of the amount of that dividend.
(4) There must be exempt from the withholding tax on interest any amount of interest if that amount is paid to any foreign person, as de ned in section 50A, by an international shipping company in respect of debt utilised to fund the acquisition, construction or improvement of a South African ship utilised for international shipping.
[Sub-s. (4) added by s. 42 (1) of Act 31 of 2013 – date of commencement: 1 January 2015; the subsection applies iro interest received or accrued on or after that date.]
[S. 12Q inserted by s. 41 (1) of Act 31 of 2013 – date of commencement: 1 April 2014; this insertion applies in respect of years of assessment commencing on or after that date.]
[NB: A s. 12R has been inserted by s. 43 (1) of Act 31 of 2013 and amended by s. 26 (1) of Act 43 of 2014 and by s. 28 (1) of Taxation Laws Amendment Act, 2015; s. 12R, as amended, is to come into operation on the date that the Special Economic Zones Act 16 of 2014 comes into operation and is to apply in respect of years of assessment commencing on or after that date. See Pendlex below.]
s 12R
Pendlex (to come into operation on the date on which the Special Economic Zones Act 16 of 2014 comes into operation)
12R Special economic zones
(1) For the purposes of this section— ‘qualifying company’ means a company—
(a) (b)
(i) incorporated by or under any law in force in the Republic or in any part thereof; or
(ii) that has its place of effective management in the Republic;
that carries on business in a special economic zone designated by the Minister of Trade and Industry in terms of the Special Economic Zones Act and approved by the Minister of Finance after consultation with the Minister of Trade and Industry for the purposes of subsection (2) by notice in the Gazette;
[Para. (b) of de nition of ‘qualifying company’ substituted by s. 26 (1) (b) of Act 43 of 2014.]
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(c) if the business or services contemplated in paragraph (b) are carried on or provided from a xed place of business situated within a special economic zone; and
(d) if not less than 90 per cent of the income of that company is derived from the carrying on of business or provision of services within one or more special economic zones;
[Para. (d) of de nition of ‘qualifying company’ substituted by s. 26 (1) (c) of Act 43 of 2014.]
‘SIC Code’ means version 7 of the Standard Industrial Classi cation Code issued by Statistics South Africa;
[De nition of ‘SIC Code’ inserted by s. 26 (1) (a) of Act 43 of 2014.]
‘special economic zone’ means a special economic zone as de ned in the Special Economic Zones Act that is approved for the purposes of this section by the Minister of Finance under subsection (3);
‘Special Economic Zones Act’ means the Special Economic Zones Act, 2014 (Act 16 of 2014).
[De nition of ‘Special Economic Zones Act’ substituted by s. 26 (1) (d) of Act 43 of 2014.]
(2) The rate of tax on taxable income attributable to income derived by a qualifying company within a special economic zone must be 15 cents on each rand of taxable income.
[Sub-s. (2) substituted by s. 26 (1) (e) of Act 43 of 2014.] (3) The Minister of Finance must approve a special economic zone for purposes of this section after taking into account the nancial implications for the State should a special economic zone be approved under this
section.
(4) Notwithstanding a qualifying company being
located in a special economic zone—
(a) subsection (2) and section 12S do not apply to
any qualifying company that conducts any of the following activities classi ed under ‘Section C: Manufacturing’ in the SIC Code:
[Words in para. (a) preceding sub-para. (i) substituted by s. 26 (1) (f) of Act 43 of 2014.]
(i) Distilling, rectifying and blending of spirits (SIC Code 1101);
[Sub-para. (i) substituted by s. 26 (1) (g) of Act 43 of 2014.] (ii) Manufacture of wines (SIC Code 1102);
[Sub-para. (ii) substituted by s. 26 (1) (g) of Act 43 of 2014.] (iii) Manufacture of malt liquors and malt (SIC
Code 103);
[Sub-para. (iii) substituted by s. 26 (1) (g) of Act 43 of 2014.]
(iv) Manufacture of tobacco products (SIC Code 12);
[Sub-para. (iv) substituted by s. 26 (1) (g) of Act 43 of 2014.]
(v) Manufacture of weapons and ammunition (SIC Code 252);
[Sub-para. (v) substituted by s. 26 (1) (g) of Act 43 of 2014.]
(vi) Manufacture of bio-fuels if that manufacture negatively impacts on food security in the Republic;
[Sub-para. (vi) added by s. 26 (1) (g) of Act 43 of 2014.] (b) subsection (2) does not apply to any qualifying company that conducts any activity classi ed in the SIC Code, which the Minister of Finance may
designate by notice in the Gazette; or
[Para. (b) substituted by s. 26 (1) (h) of Act 43 of 2014.]
(c) subsection (2) does not apply to any qualifying company if—
INCOME TAX ACT – SECTIONS