Page 233 - SAIT Compendium 2016 Volume1

s 30 INCOME TAX ACT 58 OF 1962 s 30A
(vi) members are not allowed to sell their membership rights or any entitlement in terms thereof;
(b) the club undertakes to submit to the Commissioner a copy of any amendment to the constitution or other written instrument under which it is established; and
(c) the Commissioner is satis ed that the club is or was not knowingly a party to, or does not knowingly permit, or has not knowingly permitted, itself to be used as part of any transaction, operation or scheme of which the sole or main purpose is or was the reduction, postponement or avoidance of liability for any tax, duty or levy which, but for such transaction, operation or scheme, would have been or would have become payable by any person under this Act or any other Act administered by the Commissioner.
(3) Where the constitution or other written instrument under which the club is established does not comply with the provisions of paragraph (a) of subsection (2), it shall be deemed to so comply if a person responsible in a duciary position for the funds and assets of such club furnishes the Commissioner with a written undertaking by such club that such club will be administered in compliance with the provisions of this section.
(4) Where a club applies for approval, the Commissioner may approve that club for purposes of this section, or for the purposes of any provision contained in section 10 prior to its amendment by section 10 (1) (k) of the Revenue Laws Amendment Act, 2006 (Act 20 of 2006), with retrospective effect, to the extent that the Commissioner is satis ed that that club during the period prior to its application complied with the requirements of a ‘recreational club’ as de ned in subsection (1).
[Sub-s. (4) substituted by s. 26 (1) (a) of Act 8 of 2007 and by s. 42 (1) of Act 17 of 2009.]
(5) Where the Commissioner is—
(a) satis ed that any recreational club approved under
subsection (2) has during any year of assessment in
any material respect; or
(b) during any year of assessment satis ed that any such
recreational club has on a continuous or repetitive
basis,
failed to comply with the provisions of this section, or the constitution or other written instrument under which it was established to the extent that it relates to the provisions of this section, the Commissioner shall notify the recreational club that he or she intends to withdraw the approval of that recreational club if no corrective steps are taken by that club within a period stated in that notice.
(6) If no corrective steps are taken by a recreational club as contemplated in subsection (5), the Commissioner must withdraw approval of that club with effect from the commencement of the year of assessment contemplated in subsection (5).
(7) If the Commissioner has withdrawn the approval of a recreational club, that club must within six months after the date of that withdrawal (or such longer period as the Commissioner may allow) transfer or take reasonable steps to transfer its remaining assets to any recreational club, public bene t organisation, institution, board or body or the government, as contemplated in subsection (2) (a) (iii).
[Sub-s. (7) substituted by s. 26 (1) (b) of Act 8 of 2007 and by s. 54 (1) (c) of Act 7 of 2010.]
(7A) As part of its dissolution the club must transfer its assets to a recreational club, public bene t organisation, institution, board or body or the government, as contemplated in subsection (2) (a) (iii).
seasonal membership; and
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shall be guilty of an offence and liable on conviction to a ne or to imprisonment for a period not exceeding 24 months.
[Sub-s. (11) deleted by s. 31 (1) (b) of Act 74 of 2002 and inserted by s. 8 of Act 21 of 2012.]
(12) . . .
[Sub-s. (12) deleted by s. 36 (1) (e) of Act 31 of 2005.]
[S. 30 amended by s. 26 of Act 113 of 1993, repealed by s. 20 (1) of Act 21 of 1994 and inserted by s. 35 (1) of Act 30 of 2000.]
30A Recreational clubs
(1) For purposes of this Act, ‘recreational club’ means any non-pro t company as de ned in section 1 of the Companies Act, society or other association of which the sole or principal object is to provide social and recreational amenities or facilities for the members of that company, society or other association.
[Sub-s. (1) substituted by s. 54 (1) (a) of Act 7 of 2010 and by s. 80 of Act 31 of 2013 – date of commencement: 12 December 2013.]
(2) The Commissioner must approve a recreational club for the purposes of section 10 (1) (cO), if—
(a) that club has submitted to the Commissioner a copy
of the constitution or other written instrument in terms of which it is established and which provides that—
(i) it is required to have at least three persons, who are not connected persons in relation to each other, to accept the duciary responsibility of that club and no single person directly or indirectly controls the decision making powers relating to that club;
[Sub-para. (i) substituted by s. 42 (a) of Act 60 of 2008.] (iA) its activities must be carried on in a non-pro t
manner;
[Sub-para. (iA) inserted by s. 42 (a) of Act 60 of 2008.]
(ii) it is prohibited from directly or indirectly distributing any surplus funds to any person,
other than in terms of subparagraph (iii);
(iii) it is required on dissolution to transfer its assets
and funds to—
(aa)any other recreational club which is
approved by the Commissioner in terms of
this section;
(bb) a public bene t organisation contemplated
in paragraph (a) (i) of the de nition of a ‘public bene t organisation’ in section 30 (1) which has been approved in terms of section 30 (3);
(cc) any institution, board or body which is exempt from tax under the provisions of section 10 (1) (cA) (i), which has as its sole or principal object the carrying on of any public bene t activity; or
(dd)the government of the Republic in the national, provincial or local sphere, contemplated in section 10 (1) (a);
[Sub-para. (iii) substituted by s. 54 (1) (b) of Act 7 of 2010.] (iv) it may not pay any remuneration to any person which is excessive, having regard to what is generally considered reasonable in the sector and in relation to the service rendered, nor may any remuneration be determined as a percentage of
any amounts received or accrued to that club;
[Sub-para. (iv) substituted by s. 42 (b) of Act 60 of 2008.] (v) all members must be entitled to annual or
[Sub-s. (7A) inserted by s. 54 (1) (d) of Act 7 of 2010.]
INCOME TAX ACT – SECTIONS