Page 292 - SAIT Compendium 2016 Volume1

s 64F INCOME TAX ACT 58 OF 1962 s 64G
[Sub-s. (2) added (and the existing s. 64F renumbered to sub-s. (1)) by s. 86 (1) (e) of Act 22 of 2012 and substituted by s. 104 (1) (b) of Act 31 of 2013 – substitution deemed to have come into operation on 1 April 2013 and applies in respect of years of assessment commencing on or after that date.]
[S. 64F inserted by s. 56 (1) of Act 60 of 2008, substituted by s. 53 (1) of Act 17 of 2009 and amended by s. 78 (1) (b) of Act 24 of 2011 (date of commencement: 1 April 2012) and by s. 86 (1) of Act 22 of 2012.]
64FA Exemption from and reduction of tax in respect of dividends in specie
(1) Where a company declares and pays a dividend that consists of a distribution of an asset in specie, that dividend is exempt from the dividends tax to the extent that it constitutes a distribution of an asset in specie if— (a) the person to whom the payment is made has, by the
date of payment of the dividend, submitted to the company—
(i) a declaration by the bene cial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been exempt from the dividends tax in terms of section 64F; and
(ii) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the exemption applicable to the bene cial owner referred to in subparagraph (i) change or the bene cial owner cease to be a bene cial owner;
[Sub-para. (ii) substituted by s. 87 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012.]
(b) the bene cial owner forms part of the same group of companies, as de ned in section 41, as that company;
(c) the dividend constitutes a disposal as contemplated in
paragraph 51A of the Eighth Schedule; or
(d) the dividend constitutes a disposal as contemplated in
paragraph 67B (2) of the Eighth Schedule.
[Para. (d) added by s. 87 (1) (d) of Act 22 of 2012 and substituted (‘(1)’ replaced by ‘(2)’) by s. 105 (1) of Act 31 of 2013 – substitution deemed to have come into operation on 1 January 2013.]
(2) A company that declares and pays a dividend that consists of a distribution of an asset in specie is liable for the dividends tax at a reduced rate in respect of the portion of the dividend that constitutes the distribution of an asset in specie if the person to whom the payment is made has, by the date of payment of the dividend, submitted to the company—
(a) a declaration by the bene cial owner in such form as may be prescribed by the Commissioner that the portion of the dividend that constitutes a distribution of an asset in specie would, if that portion had not constituted a distribution of an asset in specie, have been subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and
(b) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the reduced rate applicable to the bene cial owner referred to in paragraph (a) change or the bene cial owner cease to be the bene cial owner.
[Para. (b) substituted by s. 87 (1) (a) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012.]
[S. 64FA inserted by s. 79 (1) of Act 24 of 2011.]
64G Withholding of dividends tax by companies declaring and paying dividends
(1) Subject to subsections (2) and (3), a company that declares and pays a dividend must withhold an amount of dividends tax from that payment calculated as contemplated in section 64E except to the extent that— (a) the dividend consists of a distribution of an asset in
specie; or
(b) the dividend is not subject to the dividends tax by
virtue of any STC credit contemplated in section 64J
having been applied.
[Sub-s. (1) substituted by s. 80 (1) of Act 24 of 2011 (date of commencement: 1 April 2012) and by. s. 88 (1) (a) of Act 22 of 2012 – (date of commencement deemed to have been 1 April 2012 as well) and by s. 106 (1) of Act 31 of 2013 – date of commencement deemed to have been
1 April 2012 also.]
(2) A company must not withhold any dividends tax from the payment of a dividend contemplated in subsection (1) if—
(a) the person to whom the payment is made has—
(i) by a date determined by the company; or
(ii) if the company did not determine a date as contemplated in subparagraph (i), by the date of
payment of the dividend,
submitted to the company—
(aa) a declaration by the bene cial owner in such
form as may be prescribed by the Commissioner that the dividend is exempt from the dividends tax in terms of section 64F; and
(bb) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the exemption applicable to the bene cial owner referred to in item (aa) change or the bene cial owner cease to be the bene cial owner;
[Item (bb) substituted by s. 88 (1) (b) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012.]
(b) the bene cial owner forms part of the same group of companies, as de ned in section 41, as the company that paid the dividend; or
(c) the payment is made to a regulated intermediary. [Sub-s. (2) substituted by s. 73 (1) of Act 7 of 2010 – date
of commencement: 1 April 2012.]
(3) A company must withhold dividends tax from the payment of a dividend contemplated in subsection (1) at a reduced rate if the person to whom the payment is made
has—
(a) by a date determined by the company; or
(b) if the company did not determine a date as
contemplated in paragraph (a), by the date of payment
of the dividend, submitted to the company—
(i) a declaration by the bene cial owner in such form as may be prescribed by the Commissioner that the dividend is subject to that reduced rate as a result of the application of an agreement for the avoidance of double taxation; and
(ii) a written undertaking in such form as may be prescribed by the Commissioner to forthwith inform the company in writing should the circumstances affecting the reduced rate applicable to the bene cial owner referred to in subparagraph (i) change or the bene cial owner cease to be the bene cial owner.
[Para. (ii) substituted by s. 88 (1) (c) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012.]
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SAIT CompendIum oF TAx LegISLATIon VoLume 1