Page 198 - SAIT Compendium 2016 Volume1

s 24I INCOME TAX ACT 58 OF 1962 s 24I
by applying the ruling exchange rate to such exchange item.
[De nition of ‘translate’ substituted by s. 36 (1) (f) of Act 60
of 2001.]
(2) The provisions of this section shall apply in respect of any—
(a) company;
(b) trust carrying on any trade;
(c) natural person who holds any amount contemplated
in paragraph (a) or (b) of the de nition of ‘exchange
item’ as trading stock; and
[Para. (c) substituted by s. 27 (1) (k) of Act 74 of 2002.] (d) natural person or trust in respect of any amount contemplated in paragraph (c) or (d) of the de nition
of ‘exchange item’:
[Para. (d) added by s. 27 (1) (l) of Act 74 of 2002.] Provided that this section does not apply in respect of any
exchange item of a person who is not a resident (other than a controlled foreign company), unless that exchange item is attributable to a permanent establishment of that person in the Republic.
[Sub-s. (2) amended by s. 31 (b) and (c) of Act 59 of 2000, substituted by s. 26 (1) (g) of Act 60 of 2001 and amended by s. 27 (1) (i) of Act 74 of 2002 and by s. 23 of Act 32 of 2004.]
(3) In determining the taxable income of any person contemplated in subsection (2), there shall be included in or deducted from the income, as the case may be, of that person—
(a) any exchange difference in respect of an exchange item of or in relation to that person, subject to subsection (10A); and
[Para. (a) substituted by s. 53 (1) (g) of Act 22 of 2012, by
s. 68 (1) (d) of Act 31 of 2013 – date of commencement: 12 December 2013 and by s. 68 (1) (e) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted paragraph applies in respect of years of assessment commencing on or after that date.]
(b) (i) any premium or like consideration received by, or paid by, such person in terms of a foreign currency option contract entered into by such person; or
(ii) any consideration paid by such person in respect of a foreign currency option contract acquired by
such person. (c) . . .
[Para. (c) substituted by s. 20 (a) of Act 3 of 2008 and deleted by s. 38 (c) of Act 17 of 2009.]
[Sub-s. (3) substituted by s. 36 (1) (h) of Act 60 of 2001.]
(4) . . .
[Sub-s. (4) substituted by s. 18 (1) (e) of Act 21 of 1994, amended by s. 31 (d) of Act 59 of 2000 and deleted by s. 27 (1) (m) of Act 74 of 2002.]
(5) . . .
[Sub-s. (5) substituted by s. 18 (1) (e) of Act 21 of 1994, amended by s. 18 (b) of Act 28 of 1997 and deleted by s. 20 (b) of Act 3 of 2008.]
(6) Any inclusion in or deduction from income in terms of this section shall be in lieu of any deduction or inclusion which may otherwise be allowed or included under any other provision of this Act.
[Sub-s. (6) substituted by s. 26 of Act 53 of 1999 and by s. 36 (1) (i) of Act 60 of 2001.]
(7) Notwithstanding the provisions of subsection (3), but subject to the provisions of section 36—
[Words in sub-s. (7) preceding para. (a) substituted by s. 44 (c) of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
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(a) any exchange difference arising from a debt having been utilised by a person in respect of—
[Words in para. (a) of sub-s. (7) preceding sub-para. (i) substituted by s. 53 (1) (h) of Act 22 of 2012.]
(i) the acquisition, installation, erection or construction of any machinery, plant, implement, utensil, building or improvements to any building, as the case may be; or
(ii) the devising, developing, creation, production, acquisition or restoration of any invention, patent, design, trade mark, copyright or other similar property or knowledge contemplated in section 11 (gA) or (gC), as the case may be;
[Sub-para. (ii) substituted by s. 33 (1) (d) of Act 31 of 2005.] (b) any exchange difference arising from a forward exchange contract or a foreign currency option contract which has been entered into by a person contemplated in paragraph (a), to the extent to which such forward exchange contract or foreign currency option contract is entered into to serve as a hedge in respect of a debt incurred or to be incurred for the utilisation thereof as
contemplated in paragraph (a); and
[Para. (b) substituted by s. 11 (1) (e) of Act 140 of 1993
and by s. 53 (1) (i) of Act 22 of 2012.]
(c) any premium or other consideration paid or payable in respect of or in terms of a foreign currency option contract entered into or acquired by a person contemplated in paragraph (a), to the extent to which such foreign currency option contract is entered into or obtained in order to serve as a hedge in respect of a debt incurred or to be incurred for the utilisation
thereof as contemplated in paragraph (a),
[Para. (c) substituted by s. 11 (1) (e) of Act 140 of 1993 and
by s. 53 (1) (i) of Act 22 of 2012.]
shall, where such exchange difference arose or such
premium or other consideration was paid or became payable in a year of assessment prior to the year of assessment during which such machinery, plant, implement, utensil, building, improvements to any building, invention, patent, design, trade mark, copyright or other similar property or knowledge was or is brought into use for the purposes of such person’s trade, be carried forward and be taken into account in the determination of the taxable income of such person in the year of assessment during which such machinery, plant, implement, utensil, building, improvements to any building, invention, patent, design, trade mark, copyright or other similar property or knowledge was or is so brought into use for the purposes of such person’s trade: Provided that where during any year of assessment subsequent to the year of assessment during which such exchange difference arose or such premium or other consideration was paid or became payable— [Words in the proviso to sub-s. (7) preceding para. (a) substituted by s. 44 (d) of Taxation Laws Amendment Act, 2015 (‘the Commissioner is satis ed that’ deleted after ‘Provided that where’) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.] (a) the debt to be incurred as contemplated in paragraph
(b) or (c) of this subsection will no longer be so
incurred;
[Para. (a) of the proviso to sub-s. (7) substituted by s. 53 (1) (j) of Act 22 of 2012.]
Prelex
Words in sub-s. (7) preceding para. (a) in force until date of promulgation of Taxation Laws Amendment Act, 2015
(7) Notwithstanding the provisions of subsection (3), but subject to the provisions of sections 36 and 37E—
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