Page 241 - SAIT Compendium 2016 Volume1

s 36 INCOME TAX ACT 58 OF 1962 s 36
subsection (7F), there shall, notwithstanding the provisions of that subsection, be deducted from the total taxable income derived by the taxpayer from mining (as determined after the deduction of any capital expenditure which does not fall to be disallowed under the said provisions and after the set-off of any assessed loss incurred by him from mining operations in a previous year of assessment which has been carried forward) so much of the total amount of capital expenditure which has been so disallowed in relation to all producing new mines owned by the taxpayer as does not exceed 25 per cent of such taxable income.
(b) The provisions of paragraph (a) shall not apply to capital expenditure incurred in respect of any new mine— (i) which has been disposed of by the taxpayer in the
current or any previous year of assessment; or
(ii) if the taxpayer is a company and its acquisition of the right to mine or the mineral rights in respect of such mine was nanced wholly or partly by the issue of any share in respect of which any dividend or foreign dividend is to be calculated with reference to that portion of the company’s pro ts which is attributable
to the operation of such mine.
[Sub-para. (ii) substituted by s. 60 (1) of Act 24 of 2011 – date of commencement: 1 April 2012.]
[Sub-s. (7G) inserted by s. 26 (d) of Act 101 of 1990.]
(8) . . .
[Sub-s. (8) substituted by s. 21 (b) of Act 65 of 1973 and by s. 28 (1) (a) of Act 85 of 1974 and deleted by s. 24 (c) of Act 141 of 1992.]
(9) . . .
[Sub-s. (9) substituted by s. 21 (b) of Act 65 of 1973 and deleted by s. 24 (c) of Act 141 of 1992.]
(10) Where separate and distinct mining operations are carried on in mines that are not contiguous, the allowance for redemption of capital expenditure shall be computed separately.
[Sub-s. (10) substituted by s. 24 (d) of Act 141 of 1992.] (11) For the purposes of this section—
‘capital expenditure’ means—
(a) expenditure (other than interest or nance charges) on shaft sinking and mine equipment (other than expenditure referred to in paragraph (d)); and
[Para. (a) substituted by s. 28 (1) (b) of Act 85 of 1974, by s. 14 (a) of Act 70 of 1989, by s. 30 of Act 129 of 1991 and by s. 26 (a) of Act 20 of 2006.]
(b) expenditure on development, general administration and management (including any interest and other charges payable after the thirty- rst day of December, 1950, on loans utilized for mining purposes) prior to the commencement of production or during any period of non-production; and
(c) in the case of any post-1973 gold mine or any post- 1990 gold mine, an allowance calculated at the rate of 10 per cent per annum in the case of a post-1973 gold mine or 12 per cent per annum in the case of any post- 1990 gold mine on the amount of the aggregate of—
(i) the expenditure referred to in paragraphs (a) and (b), excluding any interest and other charges on loans referred to in paragraph (b), if the mine is a post-1973 gold mine or a post-1990 gold mine; and
[Sub-para. (i) substituted by s. 26 (c) of Act 20 of 2006 and by s. 23 (b) of Act 3 of 2008.]
(ii) the amount (if any) allowed to rank as capital expenditure in terms of section 37;
(iii) any expenditure incurred during any period of production on development on any reef on which at the date of such development stoping has not yet commenced;
(iv) the instalments of expenditure referred to in paragraph (d); and
[Sub-para. (iv) substituted by s. 24 (f) of Act 141 of 1992.] (v) the unredeemed balance of the aggregate determined in terms of this paragraph up to the end of the year of assessment immediately preceding the year of assessment under charge and which shall include the capital allowance determined in terms of this paragraph for such
preceding year of assessment,
[Sub-para. (v) substituted by s. 24 (f) of Act 141 of 1992.] if the mine is a post-1973 gold mine, a post-1990 gold mine, for the period from the end of the month in which the expenditure is actually incurred up to the end of the year of assessment immediately preceding the rst year of assessment in respect of which the determination of the taxable income derived from the working of such mine does not result in an assessed loss or nil: Provided that—
(aa) the amount under this paragraph shall not be calculated for any period during which mining operations are not carried on in accordance with the terms of the relevant—
(A) mining authorization issued under the Minerals Act, 1991 (Act 50 of 1991); or
(B) mining right or mining permit issued in terms of the Mineral and Petroleum Resources Development Act;
[Sub-para. (B) substituted by s. 83 (b) of Act 31 of 2013 (date of commencement: 12 December 2013) and by s. 51 (1) of Act 43 of 2014 – date of commencement deemed to have been 1 May 2004.]
[Para. (aa) substituted by s. 31 (1) of Act 32 of 2004.] (bb) notwithstanding anything to the contrary in any law contained, the amount under this paragraph shall not be taken into account for the purpose
of—
(A) calculating the allowance provided for in
section 25 (2) of the Mining Rights Act,
1967;
[Sub-para. (A) substituted by s. 46 (b) of Act 35 of 2007*.]
(B) determining the pro ts of which a share is payable to the State in terms of any mining authorization issued under the Minerals Act, 1991 (Act 50 of 1991); or
(C) determining the amounts payable to the State in terms of the transitional mineral and petroleum provisions contemplated in Schedule 3 of the Taxation Laws Amendment Act, 2004 (Act 16 of 2004);
[Para. (bb) substituted by s. 31 (1) of Act 32 of 2004.] (cc) the unredeemed balance of the aggregate of the amounts referred to in subparagraphs (i) to (v) inclusive, of this paragraph, shall be determined by the deduction from such aggregate at the end
of every year of assessment—
(i) of the taxable income derived from the
working of such mine for such year of assessment, as determined before the deduction of any amount allowable under section 15 (a) in relation to such mine and
*Although s. 46 (b) of Act 35 of 2007 purports to substitute item (aa) (A), it appears that the intention was to substitute item (bb) (A).
SAIT CompendIum oF TAx LegISLATIon VoLume 1 233
INCOME TAX ACT – SECTIONS