Page 174 - SAIT Compendium 2016 Volume1

s 20B INCOME TAX ACT 58 OF 1962 s 21ter
(3) If during any year of assessment a person contemplated in subsection (1) proves that no further consideration will accrue to him or her in that year and any subsequent year as contemplated in subsection (2), so much of the amount which was disregarded in terms of subsection (1) as has not been allowed as a deduction in any year, must be allowed as a deduction from the income of that person in that year of assessment.
[S. 20B inserted by s. 20 (1) of Act 32 of 2004.]
20C Ring-fencing of interest and royalties incurred by headquarter companies
(1) For the purposes of this section—
‘ nancial assistance’ means nancial assistance contemplated in section 31 (1); and
‘royalty’ means any amount that is, before taking into account section 49D (c), subject to the withholding tax on royalties in terms of Part IVA.
[De nition of ‘royalty’ substituted by s. 36 of Taxation Laws Amendment Act, 2015 (‘49D (b)’ replaced by ‘49D (c)’) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(2) Where a headquarter company has during any year of assessment incurred any interest in respect of any nancial assistance granted to that headquarter company by a person—
(a) that is not a resident; and
(b) if that person is a company, that directly or
indirectly (and whether alone or together with any other company forming part of the same group of companies as that person) holds at least 10 per cent of the equity shares and voting rights in that headquarter company,
the amount of that interest in respect of which a deduction is allowable to that headquarter company in that year of assessment is limited to so much of the amount of interest received by or accrued to the headquarter company as relates to any portion of that nancial assistance that is directly applied as nancial assistance to any foreign company in which the headquarter company directly or indirectly (whether alone or together with any other company forming part of the same group of companies as that headquarter company) holds at least 10 per cent of the equity shares and voting rights.
(2A) Where a headquarter company has during any year of assessment incurred any amount that constitutes a royalty payable to a person—
(a) that is not a resident; and
(b) if that person is a company, that directly or
indirectly (and whether alone or together with any other company forming part of the same group of companies as that person) holds at least 10 per cent of the equity shares and voting rights in that headquarter company,
the amount of that royalty in respect of which a deduction is allowable to that headquarter company in that year of assessment is limited to so much of any amounts received by or accrued to the headquarter company in respect of—
(i) the use or right of use of or permission to use any intellectual property as de ned in section 23I; or
(ii) the imparting of or the undertaking to impart any
scienti c, technical, industrial or commercial knowledge or information, or the rendering of or the undertaking to render, any assistance or service in connection with the application or utilisation of such knowledge or information,
from any foreign company in which the headquarter company directly or indirectly (whether alone or together with any other company forming part of the same group of
companies as that headquarter company) holds at least 10 per cent of the equity shares and voting rights.
(3) Any amount that is disallowed as a deduction in any year of assessment of a headquarter company in terms of subsection (2) or (2A) must—
(a) be carried forward to the immediately succeeding
year of assessment of the headquarter company; and (b) where that amount is disallowed as a deduction—
(i) in terms of subsection (2), be deemed to be an amount of interest actually incurred by the headquarter company during that succeeding year in respect of nancial assistance granted to that headquarter company by a person that is not a resident; or
(ii) in terms of subsection (2A), be deemed to be an amount actually incurred by the headquarter company during that succeeding year that constitutes a royalty payable to a person that is not a resident.
[S. 20C inserted by s. 38 (1) of Act 7 of 2010, amended by s. 38 (1) of Act 22 of 2012 (date of commencement deemed to have been 1 April 2012) and substituted by s. 39 (1) of Act 22 of 2012 – date of commencement:
1 January 2013; the substitution applies in respect of years of assessment commencing on or after that date.]
21 Deduction of alimony, allowance or maintenance
The taxpayer shall have his taxable income reduced by so much of any amount payable by him to or on behalf of his spouse or former spouse under any order of divorce or judicial separation granted in consequence of proceedings instituted not later than the twenty- rst day of March, 1962, or under any written agreement of separation entered into not later than that date, by way of alimony or allowance or maintenance of his spouse or former spouse and any children, as the Commissioner is satis ed has been or will in respect of the year or period of assessment in question be paid out of the taxable income of the taxpayer: Provided that for the purposes of this section any order of divorce or judicial separation (hereinafter referred to as the subsequent order) which in effect supersedes any such rst- mentioned order of judicial separation or written agreement of separation and does not vary the amount of alimony, allowance or maintenance payable thereunder, shall not affect the rights which any person may have under this section, and in the case of any such person and the spouse or former spouse of such person the subsequent order shall, for the purposes of this section and the provisions of section 10 (1) (u), be deemed to have been granted in consequence of proceedings instituted on or before the said date.
[S. 21 substituted by s. 16 of Act 90 of 1962 and by s. 16 (1) of Act 90 of 1972 and amended by s. 16 of Act 104 of 1980 and by s. 18 of Act 21 of 1995.]
21bis . . .
[S. 21bis inserted by s. 7 of Act 6 of 1963, substituted by s. 20 (1) of Act 85 of 1974, amended by s. 18 of Act 69 of 1975 and repealed by s. 19 of Act 94 of 1983.]
21ter . . .
[S. 21ter inserted by s. 20 (1) of Act 89 of 1969, amended by s. 17 of Act 52 of 1970, by s. 18 (1) of Act 88 of 1971, amended by s. 18 (1) of Act 88 of 1971, by s. 17 of Act 90 of 1972, by s. 16 (1) of Act 65 of 1973, by s. 21 (1) of Act 85 of 1974, by s. 19 of Act 69 of 1975, by s. 14 (1) of Act 103 of 1976, by s. 16 (1) of Act 113 of 1977, by s. 17 (1) of Act 91 of 1982 and by s. 1 of Act 49 of 1996 and repealed by s. 24 (1) of Act 53 of 1999.]
166 SAIT CompendIum oF TAx LegISLATIon VoLume 1