Page 236 - SAIT Compendium 2016 Volume1

s 30C INCOME TAX ACT 58 OF 1962 s 31
directed to the furtherance of the sole or principal
object of that small business funding entity;
(ix) the small business funding entity may 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; (x) the small business funding entity must as part of
its dissolution transfer its assets to—
(aa) another small business funding entity 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 public bene t organisation in section 30 (1) that is approved by the Commissioner as a public bene t organisation in terms of that section;
(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 (d) (i)
will submit any amendment of the constitution or written instrument of the small business funding entity to the Commissioner within 30 days of its amendment;
(xii) the small business funding entity will comply with such reporting requirements as may be determined by the Commissioner from time to time; and
(xiii)the small business funding 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).
(2) Where the Commissioner is—
(a) satis ed that any small business funding entity
approved in terms of subsection (1) has during any
year of assessment in any material respect; or
(b) during any year of assessment satis ed that any small business funding entity approved in terms of subsection (1) has on a continuous or repetitive basis, failed to comply with this section, or the constitution or written instrument under which that small business funding entity was established to the extent that it relates to this section, the Commissioner must notify the small business funding entity that the Commissioner intends to withdraw approval of the small business funding entity if corrective steps are not taken by the small business
funding entity within the period stated in the notice.
(3) If no corrective steps are taken by the small business funding entity as contemplated in subsection (2), the Commissioner must withdraw approval of that small business funding entity with effect from the commencement
of the year of assessment contemplated in subsection (2). (4) If the Commissioner has withdrawn the approval of a small business funding entity as contemplated in subsection (3) the small business funding entity must within six months after the date of the withdrawal of approval (or such longer period as the Commissioner may allow) transfer, or take reasonable steps to transfer, its remaining assets to any small business funding entity, public bene t organisation, institution, board or body
or the government of the Republic, as contemplated in subsection (1) (d) (x).
(5) If a small business funding entity is wound up or liquidated, the small business funding entity must, as part of the winding-up or liquidation, transfer its assets remaining after the satisfaction of its liabilities to any small business funding entity, public bene t organisation, institution, board or body or the government of the Republic, as contemplated in subsection (1) (d) (x).
(6) If a small business funding entity fails to transfer, or to take reasonable steps to transfer, its assets as contemplated in subsection (4) or (5), 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 small business funding entity must for the purposes of this Act be deemed to be an amount of taxable income which accrued to that small business funding entity during the year of assessment in which the withdrawal of approval in terms of subsection (4) or the winding-up or liquidation contemplated in subsection (5) took place.
(7) Any person who is in a duciary capacity responsible for the management of any small business funding entity and who intentionally fails to comply with any provision of this section or of the constitution, or other written instrument under which that small business funding entity 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.
[S. 30C inserted by s. 49 (1) of Act 43 of 2014 – date of commencement: 1 March 2015.]
31 Tax payable in respect of international transactions to be based on arm’s length principle
(1) For the purposes of this section—
‘affected transaction’ means any transaction, operation, scheme, agreement or understanding where— (a) that transaction, operation, scheme, agreement or
understanding has been directly or indirectly entered into or effected between or for the bene t of either or
both— (i) (aa)
(bb)
(ii) (aa) (bb)
(iii) (aa) (bb)
(iv) (aa) (bb)
a person that is a resident; and
any other person that is not a resident;
a person that is not a resident; and
any other person that is not a resident that has a permanent establishment in the Republic to which the transaction, operation, scheme, agreement or understanding relates;
a person that is a resident; and
any other person that is a resident that has a permanent establishment outside the Republic to which the transaction, operation, scheme, agreement or understanding relates; or
a person that is not a resident; and
any other person that is a controlled foreign company in relation to any resident,
and those persons are connected persons in relation to
one another; and
(b) any term or condition of that transaction, operation,
scheme, agreement or understanding is different from any term or condition that would have existed had those persons been independent persons dealing at arm’s length;
‘ nancial assistance’ includes any—
[Words in de nition of ‘ nancial assistance’ preceding para. (a) substituted by s. 82 (1) (a) of Act 31 of 2013 – date of commencement: 1 April 2014; the substituted
wording applies in respect of years of assessment commencing on or after that date.]
228 SAIT CompendIum oF TAx LegISLATIon VoLume 1