Page 287 - SAIT Compendium 2016 Volume1

s 64B INCOME TAX ACT 58 OF 1962 s 64C
have come into operation on 1 October 2012 (ito paras. 54 and 55 of the Schedule to Act 28 of 2011). That mistake was recti ed in Issue 2. This means that the said deletion (of ss. 64B (9) and 64K (6)) is not yet in operation – that will come into operation on a date to be proclaimed by the President in the Gazette.]
(10) . . .
[Sub-s. (10) amended by s. 36 (1) (f) of Act 74 of 2002 and deleted by s. 58 (1) (r) of Act 45 of 2003.]
(11) . . .
[Sub-s. (11) substituted by s. 40 (1) (g) of Act 32 of 2004 and deleted by s. 271 of Act 28 of 2011.]
(12) . . .
[Sub-s. (12) deleted by s. 100 (1) of Act 31 of 2013 –
deletion deemed to have come into operation on 1 January 2013 and applies in respect of years of assessment commencing on or after that date.]
(13) In the determination of the net amount of any dividend declared by a company which carries on long- term insurance business, the amount to be taken into account in terms of subsection (3) in respect of dividends accrued to the company shall be limited to dividends accrued on shares constituting an asset in its corporate fund.
[Sub-s. (13) amended by s. 35 (b) of Act 53 of 1999, by
s. 32 (b) and (c) of Act 20 of 2006 and substituted by s. 39 (1) (b) of Act 8 of 2007 and by s. 51 (1) (h) of Act 17 of 2009.]
(14) . . .
[Sub-s. (14) substituted by s. 35 (c) of Act 53 of 1999 and deleted by s. 32 (d) of Act 20 of 2006.]
(15) to (17) inclusive . . .
[Sub-ss. (15) to (17) inclusive added by s. 24 (1) (h) of Act 21 of 1994 and deleted by s. 32 (1) (g) of Act 3 of 2008.]
[S. 64B inserted by s. 34 (1) of Act 113 of 1993.]
64C Certain amounts distributed deemed to be dividends
(1) For the purposes of this section—
‘recipient’ . . .
[De nition of ‘recipient’ amended by s. 40 (1) of Act 30 of
2000 and deleted by s. 59 (1) (a) of Act 45 of 2003.] ‘share incentive scheme’ means a scheme in terms of which not more than 20 per cent of the equity share capital
of a company is—
(a) held by the directors and full-time employees of—
(i) such company; or
(ii) an associated institution, as de ned in paragraph
1 of the Seventh Schedule, in relation to such
company,
in terms of a share incentive scheme carried on for their own bene t;
(b) held by a trustee for the bene t of such directors and employees under an employee share scheme as de ned in section 95 (1) (c) of the Companies Act; or
[Para. (b) deleted by s. 69 (1) (b) of Act 7 of 2010, inserted by s. 74 (1) (b) of Act 24 of 2011 and substituted by s. 101 of Act 31 of 2013 – date of commencement: 12 December 2013.]
(c) collectively held by such directors and full-time employees, and such a trustee.
[De nition of ‘share incentive scheme’ added by s. 37 (1) (a) of Act 74 of 2002.]
(2) For the purposes of section 64B, an amount shall, subject to the provisions of subsection (4), be deemed to be a dividend declared by a company to a shareholder, where— (a) any cash or asset is distributed or transferred by that
company to or for the bene t of that shareholder or any connected person in relation to that shareholder;
(b) the shareholder or any connected person in relation to that shareholder is released or relieved from any obligation measurable in money which is owed to that company by that shareholder or connected person, to the extent that the amount so owed was not already deemed to be a dividend declared by that company in terms of paragraph (g);
[Para. (b) substituted by s. 41 (1) (a) of Act 32 of 2004.] (c) any debt owed by the shareholder or any connected person in relation to that shareholder to any third
party is paid or settled by that company;
(d) any amount is used or applied by that company in any other manner for the bene t of the shareholder or any
connected person in relation to that shareholder;
(e) that amount represents the greater of—
(i) the difference between—
(aa) the taxable income or assessed loss of that
company; and
(bb) the taxable income or assessed loss of that
company without regard to section 31 (2);
and (ii) nil;
[Para. (e) substituted by s. 48 (1) (a) of Act 31 of 2005 and by s. 69 (1) (c) of Act 7 of 2010 – date of commencement: 1 October 2011.]
(f) the company ceases to be a resident to the extent that the market value of all the assets of the company on the date immediately before the day on which the company ceases to be a resident exceeds—
(i) the liabilities of that company as at that date; and (ii) the sum of the contributed tax capital of all the classes of shares of that company as at that date;
[Para. (f) substituted by s. 69 (1) (d) of Act 7 of 2010.] (g) any loan or advance is granted and made available to that shareholder or connected person in relation to
that shareholder;
(h) that amount is incurred by that company in terms of
an instrument in respect of which section 8F applies:
[Para. (h) added by s. 41 (1) (c) of Act 32 of 2004.] Provided that, for purposes of this subsection, in
determining whether a person is a shareholder or connected person in relation to a shareholder in relation to any company, no regard must be had to any share that is a listed share.
[Sub-s. (2) substituted by s. 37 (1) (b) of Act 74 of 2002 and by s. 59 (1) (b) of Act 45 of 2003 and amended by s. 52 (1) (a) of Act 17 of 2009 and by s. 69 (1) (e) of Act 7 of 2010.]
(3) . . .
[Sub-s. (3) amended by s. 30 (c) of Act 21 of 1995, by s. 37 (1) (c) of Act 74 of 2002 and by s. 38 (1) (b) of Act 12 of 2003 and deleted by s. 59 (1) (c) of Act 45 of 2003.]
(4) The provisions of subsection (2) shall not apply— (a) where the amount would have constituted a dividend as de ned in section 1 without regard to paragraphs
(i), (ii), (iii) and (iv) of that de nition;
[Para. (a) substituted by s. 13 (1) (a) of Act 140 of 1993
and by s. 59 (1) (e) of Act 45 of 2003, deleted by s. 69 (1) (f) of Act 7 of 2010, inserted by s. 74 (1) (c) of Act 24 of 2011 (date of commencement deemed to have been 1 January 2011) and substituted by s. 82 (1) of Act 22 of 2012 – date of commencement also deemed to have been 1 January 2011.]
(b) where the amount constitutes remuneration in the hands of the shareholder or any connected person in relation to that shareholder or the settlement of any debt owed by the company to the shareholder or connected person;
SAIT CompendIum oF TAx LegISLATIon VoLume 1
[Para. (b) substituted by s. 59 (1) (e) of Act 45 of 2003.] 279
INCOME TAX ACT – SECTIONS