Page 199 - SAIT Compendium 2016 Volume1

s 24I INCOME TAX ACT 58 OF 1962 s 24I
(b) such debt has not been utilised as contemplated in paragraph (a); or
[Para. (b) of the proviso to sub-s. (7) substituted by s. 53 (1) (j) of Act 22 of 2012.]
(c) any such asset, property or knowledge will no longer be brought into use for the purpose of such person’s trade,
such exchange difference or premium or other consideration shall no longer be carried forward, but shall be taken into account in the determination of such person’s taxable income in such subsequent year of assessment. [Sub-s. (7) amended by s. 11 (1) (d) of Act 140 of 1993, by s. 18 (1) (f) of Act 21 of 1994, by s. 13 (1) (b) of Act 36 of 1996 and by s. 36 (1) (j) of Act 60 of 2001.]
(7A) . . .
[Sub-s. (7A) inserted by s. 18 (1) (g) of Act 21 of 1994,
amended by s. 36 (1) (k) of Act 60 of 2001, by s. 33 (1) (e) of Act 31 of 2005, by s. 26 (1) (b) of Act 9 of 2006 and by s. 68 (1) (f) of Act 31 of 2013 (date of commencement: 31 December 2013) and deleted by s. 68 (1) (g) of Act 31 of 2013 – date of commencement: 1 January 2014; the deletion applies in respect of years of assessment commencing on or after that date.]
(8) Any foreign exchange loss sustained in respect of a transaction entered into by a person, or any premium or other consideration paid in respect of or in terms of a foreign currency option contract entered into or acquired by a person, shall not be allowed as a deduction from such person’s income under subsection (3) if such transaction was entered into or such foreign currency option contract was entered into or acquired solely or mainly to enjoy a reduction in tax by way of a deduction from income.
[Sub-s. (8) substituted by s. 36 (1) (l) of Act 60 of 2001.]
(9) . . .
[Sub-s. (9) added by s. 36 (1) (m) of Act 60 of 2001, substituted by s. 42 (1) (b) of Act 45 of 2003 and deleted by s. 33 (1) (f) of Act 31 of 2005.]
(10) . . .
[Sub-s. (10) added by s. 36 (1) (m) of Act 60 of 2001, substituted by s. 27 (1) (n) of Act 74 of 2002, amended by s. 42 (1) (c) of Act 45 of 2003, substituted by s. 33 (1) (g) of Act 31 of 2005 and amended by s. 26 (1) (c) of Act 9 of 2006, by s. 23 (1) (a) of Act 8 of 2007, by s. 40 (1) (b), (c) and (d) of Act 35 of 2007 and by s. 53 (1) (k) and (l) of Act 22 of 2012 and deleted by s. 68 (1) (h) of Act 31 of 2013 – date of commencement:
1 January 2014; the deletion applies in respect of years of assessment commencing on or after that date.]
(10A) (a) Subject to paragraph (b), no exchange difference arising during any year of assessment in respect of an exchange item contemplated in paragraph (b) of the de nition of ‘exchange item’ shall be included in or deducted from the income of a person in terms of this section—
(i) if, at the end of that year of assessment—
(aa) that person and the other party to the contractual
provisions of that exchange item—
(A) form part of the same group of companies;
or
(B) are connected persons in relation to each
other; and
(bb) no forward exchange contract and no foreign
currency option contract has been entered into by that person to serve as a hedge in respect of that exchange item; and
(ii) [if] that exchange item—
(aa) or any portion thereof does not represent for that
person a current asset or a current liability for the purposes of nancial reporting pursuant to IFRS; and
(bb) is not directly or indirectly funded by any debt owed to any person that—
(A) does not form part of the same group of
companies as; or
(B) is not a connected person in relation to, that person or the other party to the contractual provisions of that exchange item.
[Para.(a)substitutedbys.40ofAct43of2014–dateof commencement: 20 January 2015.]
(b) Where paragraph (a) was applied during any year of assessment to any exchange difference in respect of an exchange item and—
(i) that exchange difference was not included in nor deducted from the income of a person in that year of assessment; and
(ii) during any year of assessment—
(aa) subsequent to that year of assessment, paragraph
(a) no longer applies to that exchange difference;
or
(bb) that exchange item is realised,
an amount in respect of that exchange item must be included in or deducted from the income of that person in that subsequent year of assessment or in the year of assessment during which the exchange item is realised[,] which amount shall be determined by multiplying that exchange item by the difference between the ruling exchange rate on the last day of the year of assessment immediately preceding that subsequent year of assessment and the ruling exchange rate on transaction date, less any amount of the exchange differences included in or deducted from the income of that person in terms of this section in respect of that exchange item for all years of assessment preceding that subsequent year of assessment during which the person was a party to the contractual provisions of the exchange item.
[Words following item (bb) substituted by s. 68 (1) (i) 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 and by s. 68 (1) (j) of Act 31 of 2013 – date of commencement: 1 January 2014; the substituted wording applies in respect of years of assessment commencing on or after that date.]
[Sub-s. (10A) inserted by s. 53 (1) (m) of Act 22 of 2012 – date of commencement: 1 January 2013; the insertion applies in respect of years of assessment commencing on or after that date.]
(11) . . .
[Sub-s. (11) added by s. 36 (1) (m) of Act 60 of 2001, substituted by s. 27 (1) (n) of Act 74 of 2002 and deleted by s. 53 (1) (n) of Act 22 of 2012 – date of commencement: 1 January 2013; the deletion applies in respect of exchange differences arising on or after that date.]
(11A) . . .
[Sub-s. (11A) inserted by s. 19 (1) of Act 20 of 2006, amended by s. 23 (1) (b) and (c) of Act 8 of 2007, substituted by s. 52 (1) of Act 24 of 2011 and deleted by s. 68 (1) (k) of Act 31 of 2013 – date of commencement: 1 January 2014; the deletion applies in respect of years of assessment commencing on or after that date.]
(12) Where a person holds any exchange item and the provisions of this section at any time during a year of assessment—
(a) become applicable to that person, that exchange item
shall be deemed to have been acquired at that time for
the purposes of this section; or
(b) cease to apply to that person, that exchange item shall
be deemed to have been realised at that time for the purposes of this section.
SAIT CompendIum oF TAx LegISLATIon VoLume 1
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INCOME TAX ACT – SECTIONS