Page 184 - SAIT Compendium 2016 Volume1

s 23H INCOME TAX ACT 58 OF 1962 s 23I
(i) goods to be supplied, so much of the expenditure as relates to the goods actually supplied to such person in such year of assessment; or
(ii) services to be rendered, an amount which bears to the total amount of such expenditure the same ratio as the number of months in such year during which such services are rendered bears to the total number of months during which such services will be rendered or, where the period during which such services will be rendered is not determinable, such period during which the services are likely to be rendered; or
[Para. (ii) substituted by s. 36 (c) of Act 35 of 2007.]
(iii) any other bene t to which such expenditure relates, an amount which bears to the total amount of such expenditure the same ratio as the number of months in such year during which such person will enjoy such bene t bears to the total number of months during which such person will enjoy such bene t or where the period of such bene t is not determinable, such
period over which the bene t is likely to be enjoyed:
[Para. (iii) substituted by s. 34 (1) (b) of Act 60 of 2001.] Provided that the provisions of this section shall not apply—
(aa) where all the goods or services are to be supplied or
rendered within six months after the end of the year of assessment during which the expenditure was incurred, or such person will have the full enjoyment of such bene t in respect of which the expenditure was incurred within such period, unless the expenditure is allowable as a deduction in terms of section 11D (1); or
[Para. (aa) substituted by s. 34 (1) (c) of Act 60 of 2001 and by s. 36 (d) of Act 35 of 2007.]
(bb) where the aggregate of all amounts of expenditure incurred by such person, which would otherwise be limited by this section, does not exceed R100 000; or
[Para. (bb) amended by s. 2 (2) (b) of Act 8 of 2007 and by s. 1 (2) (c) of Act 3 of 2008 and substituted by s. 5 (1) of Act 13 of 2012 – date of commencement deemed to have been 1 March 2012; the substitution applies in respect of years of assessment commencing on or after that date.]
(cc) to any expenditure to which the provisions of section 24K or 24L apply; or
[Para. (cc) substituted by s. 19 (b) of Act 3 of 2008.] (dd) to any expenditure actually paid in respect of any unconditional liability to pay an amount imposed by
legislation.
(2) If in any case the apportionment of the expenditure
in accordance with subsection (1) does not reasonably represent a fair apportionment of such expenditure in respect of the goods, services or bene ts to which it relates, such apportionment must be made in such other manner as is fair and reasonable.
[Sub-s. (2) substituted by s. 38 of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(3) Notwithstanding the provisions of subsections (1) and (2), where it is during any year of assessment shown by any person that—
(a) the goods or services in respect of which the
expenditure is incurred will never be received by or
be rendered to such person; or
(b) such person will never enjoy such other bene t in
respect of which any expenditure is incurred,
[Para. (b) substituted by s. 34 (1) (d) of Act 60 of 2001.] such expenditure shall be allowed in such year, to the extent that such expenditure has been actually paid by such person.
(4) . . .
[Sub-s. (4) deleted by s. 271 of Act 28 of 2011 – date of commencement: 1 October 2012.]
[S. 23H inserted by s. 31 (1) of Act 30 of 2000.]
23I Prohibition of deductions in respect of certain intellectual property
(1) For the purposes of this section—
‘end user’ means a taxable person or a person with a permanent establishment within the Republic that uses intellectual property or any corresponding invention during a year of assessment to derive income, other than a person that derives income mainly by virtue of the grant of use or right of use or permission to use intellectual property or any corresponding invention;
[De nition of ‘end user’ substituted by s. 36 (a) of Act 43 of 2014 – date of commencement: 20 January 2015.]
‘intellectual property’ means any—
(a) patent as de ned in the Patents Act including any
application for a patent in terms of that Act;
[Para. (a) substituted by s. 58 (a) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(b) design as de ned in the Designs Act;
[Para. (b) substituted by s. 58 (a) of Act 31 of 2013 – date
of commencement: 12 December 2013.]
(c) trade mark as de ned in the Trade Marks Act; [Para. (c) substituted by s. 58 (a) of Act 31 of 2013 – date
of commencement: 12 December 2013.]
(d) copyright as de ned in the Copyright Act; and [Para. (d) substituted by s. 58 (a) of Act 31 of 2013 – date
of commencement: 12 December 2013.]
(e) patent, design, trade mark or copyright de ned or described in any similar law to that in paragraph (a), (b), (c) or (d) of a country other than the
Republic;
(f) property or right of a similar nature to that in
paragraph (a), (b), (c), (d) or (e); and
(g) knowledge connected to the use of such patent,
design, trade mark, copyright, property or right; ‘tainted intellectual property’ means intellectual
property—
(a) which was the property of the end user or of a taxable
person that is or was a connected person, as de ned
in section 31 (4), in relation to the end user;
[Para. (a) substituted by s. 36 (1) of Act 17 of 2009 and by s. 47 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012; the substitution applies in respect of years of assessment commencing on or after that date.]
(b) which is the property of a taxable person;
(c) a material part of which was used by a taxable person in carrying on a business while that property was the property of a taxable person and the end user of that property acquired that business or a material part
Prelex
Wording of sub-s. (2) in force until date of promulgation of Taxation Laws Amendment Act, 2015
(2) If the Commissioner is in any case satis ed that the apportionment of the expenditure in accordance with subsection (1) does not reasonably represent a fair apportionment of such expenditure in respect of the goods, services or bene ts to which it relates, he may direct that such apportionment be made in such other manner as to him appears fair and reasonable.
thereof as a going concern; or
176 SAIT CompendIum oF TAx LegISLATIon VoLume 1