Page 223 - SAIT Compendium 2016 Volume1

s 28
INCOME TAX ACT 58 OF 1962 s 29A
(11) In determining the taxable income derived by any person from the carrying on of short-term insurance business as contemplated in subsection (7)—
Pendlex
[NB: Subsection (7) has been deleted by s. 52 (1) (e) of Taxation Laws Amendment Act, 2015, a provision that is to come into operation on the date on which the Insurance Act, 2016, comes into operation and is to apply to years of assessment ending on or after that date.]
(8) The deduction contemplated in subsection (7) shall be allowed only—
(a) if the estimate and the provision contemplated in
subsection (7) relate to the carrying on of short-term insurance business as contemplated in subsection (7) by that controlled foreign company;
(b) if the estimate and the provision contemplated in subsection (7) (c) are required by the law of the country in which the controlled foreign company is subject to tax by virtue of residence, domicile or place of effective management;
(c) to the extent that the estimate and provision contemplated in subsection (7) (c) would have been allowed or required in terms of the Short-Term Insurance Act had the liability or provision been incurred in the Republic; and
[Para. (c) substituted by s. 61 (1) (f) of Act 22 of 2012 – date of commencement: 1 January 2013; this substitution applies in respect of years of assessment commencing on or after that date.]
(d) if the person to whom the income of the controlled foreign company is attributed submits to the Commissioner the information in respect of paragraphs (a), (b) and (c) prescribed by the Commissioner, in the form and manner and at the time and place prescribed by the Commissioner.
[Sub-s. (8) added by s. 40 (1) (b) of Act 17 of 2009.]
(9) Any deduction contemplated in subsection (7) shall be subject to such adjustments as may be made by the Commissioner.
[Sub-s. (9) added by s. 40 (1) (b) of Act 17 of 2009 and substituted by s. 51 (1) (c) of Act 7 of 2010 and by s. 61 (1) (g) of Act 22 of 2012 – date of commencement: 1 January 2013; this substitution applies in respect of years of assessment commencing on or after that date.]
(10) The sum of all amounts deducted from the sum of all premiums and other amounts received by or accrued to a controlled foreign company in respect of any foreign tax year, as de ned in section 9D (1), in terms of subsection (7) (c) shall be included in the income of that controlled foreign company in the following foreign tax year.
[Sub-s. (10) added by s. 40 (1) (b) of Act 17 of 2009.]
(a) (b)
no deduction shall be allowed in terms of section 11 (a), in respect of any liability incurred in respect of reinsurance premiums and any claims in respect of that business; and
the provisions of section 23 (e) shall not apply in respect of the liability contemplated in subsection (7) (c).
[Sub-s. (11) added by s. 40 (1) (b) of Act 17 of 2009.]
28bis . . .
[S. 28bis inserted by s. 19 (1) of Act 88 of 1965, amended by s. 25 of Act 85 of 1974, by s. 18 (1) of Act 113 of 1977, by s. 34 of Act 30 of 2000 and by s. 35 of Act 59 of 2000 and repealed by s. 38 (1) of Act 60 of 2001.]
29 . . .
[S. 29 amended by s. 18 of Act 90 of 1962, repealed by s. 23 of Act 121 of 1984, inserted by s. 25 (1) of Act 113 of 1993, amended by s. 22 of Act 21 of 1995, by s. 16 (a), (b) and (c) of Act 36 of 1996 and by s. 29 (a) and (b)ofAct53of1999andrepealedbys.22ofAct20of 2006.]
29A Taxation of long-term insurers
(1) For the purposes of this section—
‘adjusted IFRS value’ means the amount of the insurance liabilities of the insurer determined in accordance with IFRS as annually reported by the insurer to shareholders in the audited annual nancial statements, adjusted so that no policy has a liability of less than zero;
[De nition of ‘adjusted IFRS value’ inserted by
s. 47 (1) (a) of Act 43 of 2014 – date of commencement: 1 January 2016; the inserted de nition applies iro years of assessment commencing on or after that date.]
‘business’ means any long-term insurance business as de ned in section 1 of the Long-term Insurance Act;
‘insurer’ means any long-term insurer as de ned in section 1 of the Long-term Insurance Act;
‘Long-term Insurance Act’ . . .
[De nition of ‘Long-term Insurance Act’ deleted by
s. 77 (1) (a) of Act 31 of 2013 – date of commencement: 12 December 2013.]
‘market value’, in relation to any asset, means the sum which a person having the right freely to dispose of such asset might reasonably expect to obtain from a sale of such asset in the open market;
[NB: A de nition of ‘negative liability’ has been inserted by s. 53 (1) (a) of Taxation Laws Amendment Act, 2015, a provision that is to come into operation on the date on which the Insurance Act, 2016, comes into operation and is to apply iro years of assessment ending on or after that date. See Pendlex below.]
Pendlex
[NB: Subsection (8) has been deleted by s. 52 (1) (e) of Taxation Laws Amendment Act, 2015, a provision that is to come into operation on the date on which the Insurance Act, 2016, comes into operation and is to apply to years of assessment ending on or after that date.]
Pendlex
[NB: Subsection (9) has been deleted by s. 52 (1) (e) of Taxation Laws Amendment Act, 2015, a provision that is to come into operation on the date on which the Insurance Act, 2016, comes into operation and is to apply to years of assessment ending on or after that date.]
Pendlex (to come into operation on the date on which the Insurance Act, 2016, comes into operation)
‘negative liability’ means, in respect of a long-term policy, the amount by which the expected present value of future premiums exceeds the expected present value of future bene ts and expenses;
Pendlex
[NB: Subsection (10) has been deleted by s. 52 (1) (e) of Taxation Laws Amendment Act, 2015, a provision that is to come into operation on the date on which the Insurance Act, 2016, comes into operation and is to apply to years of assessment ending on or after that date.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1 215
Pendlex
[NB: Subsection (11) has been deleted by s. 52 (1) (e) of Taxation Laws Amendment Act, 2015, a provision that is to come into operation on the date on which the Insurance Act, 2016, comes into operation and is to apply to years of assessment ending on or after that date.]
INCOME TAX ACT – SECTIONS