Page 285 - SAIT Compendium 2016 Volume1

s 64B INCOME TAX ACT 58 OF 1962 s 64B
(ii) where a dividend cycle of a company ends on the day immediately before the effective date de ned in section 64D, that dividend cycle must be deemed to be the nal dividend cycle of that company;
[De nition of ‘dividend cycle’ amended by s. 51 (1) (a) of 17 of 2009 by the addition of the proviso after para. (b) – date of commencement: 1 April 2012.]
‘group of companies’ means ‘group of companies’ as de ned in section 41; and
[De nition of ‘group of companies’ inserted by s. 59 (1) (d) of Act 35 of 2007.]
‘holding company’ . . .
[De nition of ‘holding company’ added by s. 21 (1) (c) of
Act 36 of 1996, substituted by s. 48 (1) (a) of Act 60 of 2001 and deleted by s. 36 (1) (a) of Act 74 of 2002.]
‘intermediate company’ . . .
[De nition of ‘intermediate company’ inserted by s. 21 (1)
(c) of Act 36 of 1996, amended by s. 48 (1) (b) of Act 60 of 2001, substituted by s. 36 (1) (b) of Act 74 of 2002 (s. 36 (1) (b) of Act 74 of 2002 was subsequently deleted by s. 215 (1) of Act 45 of 2003) and deleted by s. 36 (1) (a) of Act 74 of 2002.]
‘pro t’ includes any amount deemed in terms of the de nition of ‘dividend’ in section 1 to be a pro t available for distribution.
[De nition of ‘pro t’ added by s. 47 (1) (b) of Act 31 of 2005.]
‘share incentive scheme’ . . .
[De nition of ‘share incentive scheme’ added by
s. 21 (1) (c) of Act 36 of 1996, substituted by s. 25 (1) (a) of Act 28 or 1997 and deleted by s. 48 (1) (c) of Act 60 of 2001.]
[Sub-s. (1) amended by s. 21 (1) (a) of Act 36 of 1996.]
(2) There shall be levied and paid for the bene t of the National Revenue Fund a tax, to be known as the secondary tax on companies, which is calculated at the rate of 10 per cent of the net amount, as determined in terms of subsection (3), of any dividend declared by any company, other than a headquarter company, which is a resident.
[Sub-s. (2) substituted by s. 24 (1) (d) of Act 21 of 1994, by
s. 21 (1) (d) of Act 36 of 1996, by s. 42 (1) (a) of Act 59 of 2000, by s. 59 (1) (e) of Act 35 of 2007 and by s. 68 (1) (b) of Act 7 of 2010.]
(3) Subject to subsection (3A), the net amount of any dividend referred to in subsection (2) is the amount by which the dividend declared by a company exceeds the sum of any dividends (other than any dividends contemplated in subsection (5) (c)) which have accrued to that company during the dividend cycle in relation to that rst-mentioned dividend: Provided that—
(a) where the sum of such dividends accrued exceeds such
dividend declared, the excess shall be carried forward and be deemed to be a dividend which accrued to the company during the succeeding dividend cycle of the company; and
(b) in the determination of the net amount of any dividend distributed in the course or in anticipation of the liquidation, winding up, deregistration or nal termination of the corporate existence of a company, there shall be allowed as a deduction any dividend contemplated in subsection (5) (c) (i) or (ii) which has during the current or any previous dividend cycle accrued to the company.
[Para. (b) substituted by s. 29 (1) (a) of Act 21 of 1995, by s. 47 (1) (d) of Act 31 of 2005 and by s. 32 (1) (a) of Act 3 of 2008.]
[Sub-s. (3) amended by s. 24 (1) (e) of Act 21 of 1994, by s. 39 (1) (a) of Act 30 of 2000, by s. 42 (1) (b) of Act 59 of 2000, by s. 58 (1) (f) of Act 45 of 2003, by s. 40 (1) (a) of Act 32 of 2004 and by s. 47 (1) (c) of Act 31 of 2005.]
(3A) In determining the sum of the dividends which have accrued to a company as contemplated in subsection (3), no regard must be had to—
(a) any dividend contemplated in subsection (5) (b) or (f);
[Para. (a) substituted by s. 47 (1) (e) of Act 31 of 2005.] (b) . . .
[Para. (b) deleted by s. 51 (1) (b) of Act 17 of 2009.]
(c) any dividend which accrued to a borrower as contemplated in the de nition of ‘securities lending arrangement’ in respect of a share which was
borrowed in terms of that arrangement; or (d) . . .
[Para. (d) amended by s. 51 (1) (d) and deleted by s. 51 (1) (c) of Act 17 of 2009 – date of commencement of deletion: 1 April 2012.]
(e) any dividend declared by a headquarter company. [Para. (e) added by s. 68 (1) (e) of Act 7 of 2010.]
[Sub-s. (3A) inserted by s. 40 (1) (b) of Act 32 of 2004.]
(4) (a) Where any dividend is declared by a company subject to the condition that it will be payable to shareholders registered in the company’s share register on a speci ed date, such dividend or interim dividend shall for the purposes of this section be deemed to accrue to the shareholders on that date: Provided that any dividend so declared by a company—
(i) before the effective date as de ned in section 64D; and
(ii) that will only accrue to shareholders in that company’s share register on a date after that effective date,
must be deemed to have accrued to such shareholders on the day immediately before that effective date.
[Para. (a) substituted (by the addition of a proviso) by s. 81 (1) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012.]
(b) Any interim dividend declared by a company otherwise than as contemplated in paragraph (a), shall for the purposes of this section be deemed to accrue to the shareholders on the date upon which it is declared.
(c) Where any cash or assets is or are transferred or distributed—
(i) by a company to shareholders of that company otherwise than by way of a formal declaration of a dividend; or
(ii) by the liquidator of a company to the shareholders of that company in the course of the winding up or liquidation of that company,
and the amount of such cash or the value of such assets, in whole or in part constitutes a dividend, such dividend shall for the purposes of this section be deemed to have been declared by the company and to have accrued to the shareholders on the date on which the shareholders became entitled to such cash or assets.
[Para. (c) amended by s. 58 (1) (g) of Act 45 of 2003.] (5) There shall be exempt from the secondary tax on
companies—
(a) dividends declared by any company (other than
a company that is a registered micro business as de ned in the Sixth Schedule) the entire receipts and accruals of which, or so much of the receipts and accruals of which as are derived otherwise than from investments, are exempt from tax under the provisions of section 10: Provided that the provisions of this paragraph shall not apply to a company which is exempt from tax under the said provisions solely because it derives gross income of a particular nature;
[Para. (a) amended by s. 12 (1) (a) of Act 140 of 1993, substituted by s. 58 (1) (h) of Act 45 of 2003 and amended by s. 51 (1) (e) of Act 17 of 2009.]
(b) any dividend declared by a xed property company contemplated in section 11 (s) which may be allowed
SAIT CompendIum oF TAx LegISLATIon VoLume 1 277
INCOME TAX ACT – SECTIONS