Page 170 - SAIT Compendium 2016 Volume1

s 18A INCOME TAX ACT 58 OF 1962 s 19
(Act 56 of 2003), as the case may be, for any institution in respect of which that Act applies, has issued or allowed a receipt to be issued in contravention of subsection (2A) or utilised a donation in respect of which a receipt was issued for any purpose other than the purpose contemplated in that subsection, the Commissioner—
[Words preceding para. (a) substituted by s. 52 (1) (h) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(a) must notify the National Treasury and the Provincial Treasury (if applicable) of the contravention; and
(b) may by notice in writing addressed to that accounting
of cer or accounting authority direct that, if corrective steps are not taken by that accounting of cer or accounting authority within a period stated by the Commissioner in that notice, any receipt issued by that institution in respect of any donation made on or after the date speci ed in that notice shall not qualify as a valid receipt for purposes of subsection (2).
[Sub-s. (5B) inserted by s. 26 (1) (g) of Act 31 of 2005.]
(5C) If any public bene t organisation contemplated in subsection (1) (b), has not distributed amounts as contemplated in subsection (2D), or has not incurred the obligation to distribute those amounts received in respect of investment assets held by it, those amounts shall be deemed to be taxable income of that public bene t organisation in that year of assessment.
[Sub-s. (5C) inserted by s. 29 (1) (d) of Act 43 of 2014 (date of commencement: 1 March 2015) and substituted by s. 34 of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
who intentionally fails to comply with any provisions of this section, or a provision of the constitution, will or other written instrument under which such organisation is established to the extent that it relates to the provisions of this section, shall be guilty of an offence and liable on conviction to a ne or to imprisonment for a period not exceeding 24 months.
[Sub-s. (7) added by s. 7 of Act 21 of 2012 – date of commencement: 20 December 2012.]
[S. 18A inserted by s. 15 of Act 52 of 1970, amended by
s. 16 (1) of Act 88 of 1971, by s. 13 of Act 90 of 1972, by s. 14 of Act 65 of 1973, by s. 16 of Act 69 of 1975 and by s. 13 (1) of Act 104 of 1980, substituted by s. 16 (1) of Act 96 of 1981, amended by s. 14 (1) of Act 91 of 1982, by
s. 16 (1) of Act 94 of 1983 by s. 16 (1) of Act 121 of 1984, by s. 15 of Act 90 of 1998, by s. 17 of Act 101 of 1990, by s. 20 of Act 129 of 1991 and by s. 11 (1) of Act 36 of 1996 and substituted by s. 24 (1) of Act 30 of 2000.]
18B . . .
[S. 18B inserted by s. 11 (1) of Act 65 of 1986, amended by s. 19 of Act 141 of 1992 and repealed by s. 14 of Act 21 of 1994.]
19 Reduction of debt
[Heading substituted by s. 53 (1) (a) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of years of assessment commencing on or after that date.]
(1) For the purposes of this section—
‘allowance asset’ means a capital asset in respect of which a deduction or allowance is allowable in terms of this Act for purposes other than the determination of any capital gain or capital loss;
‘capital asset’ means an asset as de ned in paragraph 1 of the Eighth Schedule that is not trading stock;
‘debt’ does not include a tax debt as de ned in section 1 of the Tax Administration Act;
‘reduction amount’, in relation to a debt owed by a person, means any amount by which that debt is reduced less any amount applied by that person as consideration for that reduction.
(2) Subject to subsection (8), this section applies where a debt that is owed by a person is reduced by any amount and— (a) the amount of that debt was used, directly or
indirectly, to fund any expenditure in respect of which a deduction or allowance was granted in terms of this Act; and
(b) the amount of that reduction exceeds any amount applied by that person as consideration for the reduction.
(3) Where—
(a) a debt owed by a person is reduced as contemplated in
subsection (2); and
(b) the amount of that debt was used as contemplated in
paragraph (a) of that subsection to fund expenditure incurred in respect of trading stock that is held and not disposed of by that person at the time of the reduction of the debt,
[Para. (b) substituted by s. 53 (1) (b) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013 and applies in respect of years of assessment commencing on or after that date.]
the reduction amount in respect of that debt must, to the extent that an amount is taken into account by that person in respect of that trading stock in terms of section 11 (a) or 22 (1) or (2) for the year of assessment in which the debt is so reduced, be applied to reduce the amount so taken into account in respect of that trading stock.
Prelex
Wording of sub-s. (5C) in force until date of promulgation of Taxation Laws Amendment Act, 2015
(5C) If the Commissioner has reasonable grounds for believing that any public bene t organisation contemplated in subsection (1) (b), has not distributed amounts as contemplated in subsection (2D), or has not incurred the obligation to distribute those amounts received in respect of investment assets held by it, those amounts shall be deemed to be taxable income of that public bene t organisation in that year of assessment.
(6) The Commissioner may, for the purposes of this section, approve a group of institutions, boards or bodies contemplated in subsection (1) (a) (ii), sharing a common purpose which carry on any public bene t activity under the direction or supervision of a regulating or co- ordinating body, where that body takes such steps, as prescribed by the Commissioner, to exercise control over those institutions, boards or bodies in order to ensure that they comply with the provisions of this section.
[Sub-s. (6) added by s. 20 (f) of Act 30 of 2002.] (7) Any person who is—
(i) in a duciary capacity responsible for the management or control of the income and assets of any public bene t organisation, institution, board or body contemplated in this section; or
(ii) the accounting of cer or accounting authority contemplated in the Public Finance Management Act or the Local Government: Municipal Finance Management Act, 2003 (Act 56 of 2003), as the case may be, for any institution in respect of which that Act applies,
[Para. (ii) substituted by s. 52 (1) (i) of Act 31 of 2013 – date of commencement: 12 December 2013.]
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(4) Where—
SAIT CompendIum oF TAx LegISLATIon VoLume 1