Page 185 - SAIT Compendium 2016 Volume1

s 23I INCOME TAX ACT 58 OF 1962 s 23K
(d) which was discovered, devised, developed, created or produced by the end user of that property, or by a taxable person that is a connected person, as de ned in section 31 (4), in relation to the end user, if that end user, together with any taxable person that is a connected person in relation to that end user, holds at least 20 per cent of the participation rights, as de ned in section 9D, in a person by or to whom an amount is received or accrues—
[Words in para. (d) preceding sub-para. (i) substituted by s. 47 (1) (b) 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.]
(i) by virtue of the grant of use or right of use or permission to use that property; or
[Sub-para. (i) substituted by s. 36 (b) of Act 43 of 2014 – date of commencement: 20 January 2015.]
(ii) where that receipt, accrual or amount is determined directly or indirectly with reference to expenditure incurred for the use or right of use or permission to use that property;
[Sub-para. (ii) substituted by s. 36 (b) of Act 43 of 2014 – date of commencement: 20 January 2015.]
‘taxable person’ means any person other than—
(a) a person that is not a resident;
(b) the government of the Republic in the national,
provincial or local sphere contemplated in section 10 (1) (a);
[Para. (b) substituted by s. 44 of Act 7 of 2010.]
(c) an institution, board or body contemplated in section
10 (1) (cA);
(d) any public bene t organisation as de ned in section
30 that has been approved by the Commissioner in
terms of that section;
(e) any recreational club as de ned in section 30A that
has been approved by the Commissioner in terms of
that section;
(f) any company or trust contemplated in section 37A; (g) any fund contemplated in section 10 (1) (d) (i) or (ii);
or
(h) any person contemplated in section 10 (1) (t).
(2) Other than a deduction allowed in terms of section 11 (gC) or a deduction allowed in respect of trading stock, a deduction is not allowed in respect of—
(a) any amount of expenditure incurred for the use or
right of use of or permission to use tainted intellectual
property; or
[Para. (a) substituted by s. 58 (b) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(b) expenditure the incurral or amount of which is determined directly or indirectly with reference to expenditure incurred for the use or[,] right of use of or permission to use tainted intellectual property,
[Para. (b) substituted by s. 36 (c) of Act 43 of 2014 – date of commencement: 20 January 2015.]
to the extent that the amount of expenditure does not con- stitute income received by or accrued to any other person or to the extent that the amount of expenditure does not constitute a proportional amount of net income of a controlled foreign company an amount equal to which is included in the income of any resident in terms of section 9D.
(3) Notwithstanding any provision of subsection (2) to the contrary, an amount equal to—
(a) one third of any expenditure contemplated in
subsection (2) must be allowed to be deducted if withholding tax on royalties contemplated in Part
IVA is payable in respect of that amount at a rate of
10 per cent; or
(b) one half of any expenditure contemplated in
subsection (2) must be allowed to be deducted if withholding tax on royalties contemplated in Part IVA is payable in respect of that amount at a rate of 15 per cent.
[Sub-s. (3) substituted by s. 47 (1) (c) of Act 22 of 2012 – date of commencement: 1 July 2013 and applies in respect of amounts received or accrued to the extent that those amounts constitute amounts that are paid or that become payable on or after that date.]
[S. 23I inserted by s. 37 (1) of Act 35 of 2007 and substituted by s. 38 (1) of Act 60 of 2008.]
23J . . .
[S. 23J inserted by s. 38 of Act 35 of 2007 and repealed by s. 48 (1) of Act 22 of 2012 – date of commencement: 1 January 2013. Repeal applies in respect of depreciable assets acquired by a taxpayer on or after that date.]
23K Limitation of deductions in respect of reorganisation and acquisition transactions
[Heading of s. 23K substituted by s. 49 (1) (a) of Act 22 of 2012 – date of commencement: 1 January 2013; this substitution applies in respect of acquisition transactions entered into on or after that date.]
(1) For the purposes of this section—
‘acquiring company’ means—
(a) a transferee company contemplated in the de nition
of ‘intra-group transaction’ in section 45 (1);
(b) a holding company contemplated in the de nition of
‘liquidation distribution’ in section 47 (1); or
(c) a company that acquires an equity share in another
company in terms of an acquisition transaction;
[Para. (c) added by s. 49 (1) (d) of Act 22 of 2012 – date of commencement: 1 January 2013; this addition applies in respect of acquisition transactions entered into on or after that date.]
[De nition of ‘acquiring company’ substituted by s. 50 (1) (a) of Act 24 of 2011 (date of commencement deemed to have been 3 August 2011). This substituted de nition applies in respect of any amount of interest incurred in terms of a debt instrument where that debt instrument was issued or used for the purpose of procuring, enabling, facilitating or funding the acquisition by an acquiring company of an asset in terms of a reorganisation transaction entered into on or after that date and on or before 31 March 2014 and amended by s. 49 (1) (b), (c) and (d) of Act 22 of 2012 – date of commencement: 1 January 2013; these amendments apply in respect of acquisition transactions entered into on or after that date.]
‘acquisition transaction’ means an acquisition transaction as de ned in section 24O (1) to which section 24O applies;
[De nition of ‘acquisition transaction’ inserted by s. 49 (1) (e) of Act 22 of 2012 – date of commencement: 1 January 2013; this insertion applies in respect of acquisition transactions entered into on or after that date.]
‘debt instrument’ . . .
[De nition of ‘debt instrument’ deleted by s. 49 (1) (e) of
Act 22 of 2012 – date of commencement: 1 January 2013.] ‘interest’ means interest as de ned in section 24J; ‘reorganisation transaction’ means—
(a) an intra-group transaction as de ned in section 45 (1) to which section 45 applies; or
(b) a liquidation distribution as de ned in section 47 (1) to which section 47 applies.
[De nition of ‘reorganisation transaction’ substituted by s. 50 (1) (b) of Act 24 of 2011 – date of commencement deemed to have been 3 August 2011. This substituted
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INCOME TAX ACT – SECTIONS