Page 234 - SAIT Compendium 2016 Volume1

s 30A INCOME TAX ACT 58 OF 1962 s 30B
(8) If the recreational club fails to transfer, or to take reasonable steps to transfer, its assets as contemplated in subsection (7) or (7A), an amount equal to the market value of those assets which have not been transferred less an amount equal to the bona de liabilities of that recreational club must for purposes of this Act be deemed to be an amount of taxable income which accrued to that recreational club during the year of assessment in which approval was withdrawn or the dissolution took place.
[Sub-s. (8) substituted by s. 26 (1) (b) of Act 8 of 2007 and by s. 54 (1) (e) of Act 7 of 2010.]
(9) Any person who is in a duciary capacity responsible for the management or control of the income and assets of any approved recreational club and who intentionally fails to comply with any provision of this section or of the constitution, or other written instrument under which such recreational club is established to the extent that it relates to the provisions of this section, 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. (9) added by s. 9 of Act 21 of 2012.] [S. 30A inserted by s. 25 (1) of Act 20 of 2006.]
30B Associations
(1) For the purposes of this section—
‘entity’ means—
(a) any mutual loan association, delity or indemnity
fund, trade union, chamber of commerce or industry (or an association of such chambers) or local publicity association; or
(b) any—
(i) non-pro t company as de ned in section 1 of the
Companies Act; and
[Sub-para. (i) substituted by s. 81 (a) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(ii) society; or
(iii) other association of persons,
established to promote the common interests of persons (being members of the company, society or association of persons) carrying on any particular kind of business, profession or occupation,
approved by the Commissioner in accordance with subsection (2);
‘member’ in the case of a delity or indemnity fund includes a contributor to that fund;
‘mutual loan association’ means an association of which the sole or principal object is to function as a voluntary savings association where participants make regular contributions into a common pool managed by the members for the mutual nancial bene t of those members.
(2) Subject to subsections (3) and (4), the Commissioner must approve an entity for the purposes of section 10 (1) (d) (iii) or (iv) if—
[Words in sub-s. (2) preceding para. (a) substituted by s. 56 (1) of Act 24 of 2011 – date of commencement deemed to have been 31 October 2010.]
(ii) no single person may directly or indirectly control the decision-making powers relating to that entity;
(iii) the entity may not directly or indirectly distribute any of its funds or assets to any person other than in the course of furthering its objectives;
(iv) the entity is required to utilise substantially the whole of its funds for the sole or principal object for which it has been established;
(v) no member may directly or indirectly have any personal or private interest in that entity;
(vi) substantially the whole of the activities of the entity must be directed to the furtherance of its sole or principal object and not for the speci c bene t of an individual member or minority group;
(vii) the entity may not have a share or other interest in any business, profession or occupation which is carried on by its members;
(viii)the entity must not pay to any employee, of ce bearer, member or other person any remuneration, as de ned in the Fourth Schedule, which is excessive, having regard to what is generally considered reasonable in the sector and in relation to the service rendered;
(ix) substantially the whole of the entity’s funding must be derived from its annual or other long- term members or from an appropriation by the government of the Republic in the national, provincial or local sphere;
(x) the entity must as part of its dissolution transfer its assets to—
(aa)another entity approved by the Commissioner in terms of this section; (bb)a public bene t organisation approved in
terms of section 30;
(cc) an institution, board or body which is
exempt from tax under section 10 (1) (cA)
(i); or
(dd)the government of the Republic in the
national, provincial or local sphere;
(xi) the persons contemplated in paragraph (b) (i) will submit any amendment of the constitution or written instrument of the entity to the Commissioner within 30 days of its amendment;
(xii)the entity will comply with such reporting requirements as may be determined by the
Commissioner from time to time; and
(xiii) the entity is not knowingly and will not knowingly become a party to, and does not knowingly and will not knowingly permit itself to be used as part of, an impermissible avoidance arrangement contemplated in Part IIA of Chapter III, or a transaction, operation or scheme contemplated
in section 103 (5).
(3) The requirements contained in subsection (2) (b)
(iii) and (v) do not apply in respect of a mutual loan association.
(4) Where the constitution or written instrument of an entity does not comply with subsection (2) (b), the Commissioner may deem it to so comply if the person who has accepted duciary responsibility for the funds and assets of that entity furnishes the Commissioner with a written undertaking that the entity will be administered in compliance with that subsection.
[Sub-s. (4) substituted by s. 81 (b) of Act 31 of 2013 – date
of commencement: 12 December 2013.] (5) Where the Commissioner is—
(a) (b)
that entity has submitted to the Commissioner a copy of the constitution or written instrument under which it has been established;
the constitution or written instrument contemplated in paragraph (a) provides that—
(i) the entity must have a committee, board of management or similar governing body consisting of at least three persons, who are not connected persons in relation to each other, to accept the duciary responsibility of that entity;
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SAIT CompendIum oF TAx LegISLATIon VoLume 1