Page 301 - SAIT Compendium 2016 Volume1

s 80E INCOME TAX ACT 58 OF 1962 s 80L
(2) A person may be an accommodating or tax- indifferent party whether or not that person is a connected person in relation to any party.
(3) The provisions of this section do not apply if either—
(a) the amounts derived by the party in question are cumulatively subject to income tax by one or more spheres of government of countries other than the Republic which is equal to at least two-thirds of the amount of normal tax which would have been payable in connection with those amounts had they been subject to tax under this Act; or
[Para. (a) substituted by s. 41 (1) (c) of Act 8 of 2007.] (b) the party in question continues to engage directly in substantive active trading activities in connection with the avoidance arrangement for a period of at least 18 months: Provided these activities must be attributable to a place of business, place, site, agricultural land, vessel, vehicle, rolling stock or aircraft that would constitute a foreign business establishment as de ned in section 9D (1) if it were located outside the Republic and the party
in question were a controlled foreign company.
(4) For the purposes of subsection (3) (a), the amount of tax imposed by another country must be determined after taking into account any applicable agreements for the prevention of double taxation and any assessed loss, credit or rebate to which the party in question may be entitled or any other right of recovery to which that party or any connected person in relation to that party may be entitled.
[S. 80E inserted by s. 34 (1) of Act 20 of 2006.]
80F Treatment of connected persons and accommodating or tax-indifferent parties
For the purposes of applying section 80C or determining whether or not a tax bene t exists for purposes of this Part, the Commissioner may—
(a) treat parties who are connected persons in relation to
each other as one and the same person; or
(b) disregard any accommodating or tax-indifferent party or treat any accommodating or tax-indifferent party
and any other party as one and the same person.
[S. 80F inserted by s. 34 (1) of Act 20 of 2006.]
80G Presumption of purpose
(1) An avoidance arrangement is presumed to have been entered into or carried out for the sole or main purpose of obtaining a tax bene t unless and until the party obtaining a tax bene t proves that, reasonably considered in light of the relevant facts and circumstances, obtaining a tax bene t was not the sole or main purpose of the avoidance arrangement.
(2) The purpose of a step in or part of an avoidance arrangement may be different from a purpose attributable to the avoidance arrangement as a whole.
[S. 80G inserted by s. 34 (1) of Act 20 of 2006.]
80H Application to steps in or parts of an arrangement
The Commissioner may apply the provisions of this Part to steps in or parts of an arrangement.
[S. 80H inserted by s. 34 (1) of Act 20 of 2006.]
80I Use in the alternative
The Commissioner may apply the provisions of this Part in the alternative for or in addition to any other basis for raising an assessment.
[S. 80I inserted by s. 34 (1) of Act 20 of 2006.]
80J Notice
(1) The Commissioner must, prior to determining any liability of a party for tax under section 80B, give the party notice that he or she believes that the provisions of this Part may apply in respect of an arrangement and must set out in the notice his or her reasons therefor.
(2) A party who receives notice in terms of subsection (1) may, within 60 days after the date of that notice or such longer period as the Commissioner may allow, submit reasons to the Commissioner why the provisions of this Part should not be applied.
(3) The Commissioner must within 180 days of receipt of the reasons or the expiry of the period contemplated in subsection (2)—
(a) request additional information in order to determine
whether or not this Part applies in respect of an
arrangement;
(b) give notice to the party that the notice in terms of
subsection (1) has been withdrawn; or
(c) determine the liability of that party for tax in terms of
this Part.
(4) If at any stage after giving notice to the party in
terms of subsection (1), additional information comes to the knowledge of the Commissioner, he or she may revise or modify his or her reasons for applying this Part or, if the notice has been withdrawn, give notice in terms of subsection (1).
[S. 80J inserted by s. 34 (1) of Act 20 of 2006.]
80K Interest
Where the Commissioner has applied this Part in determining a party’s liability for tax, the Commissioner may not exercise his or her discretion in terms of section 89quat (3) or (3A) to direct that interest is not payable in respect of that portion of any tax which is attributable to the application of this Part.
[S. 80K inserted by s. 34 (1) of Act 20 of 2006.]
80L De nitions
For purposes of this Part—
‘arrangement’ means any transaction, operation, scheme, agreement or understanding (whether enforceable or not), including all steps therein or parts thereof, and includes any of the foregoing involving the alienation of property;
‘avoidance arrangement’ means any arrangement that, but for this Part, results in a tax bene t;
[De nition of ‘avoidance arrangement’ substituted by s. 42
(1) (a) of Act 8 of 2007.]
‘impermissible avoidance arrangement’ means any
avoidance arrangement described in section 80A; ‘party’ means any—
(a) person;
(b) permanent establishment in the Republic of a person
who is not a resident;
(c) permanent establishment outside the Republic of a
person who is a resident;
(d) partnership; or
(e) joint venture,
who participates or takes part in an arrangement;
‘tax’ includes any tax, levy or duty imposed by this Act or any other Act administered by the Commissioner;
[De nition of ‘tax’ substituted by s. 42 (1) (b) of Act 8 of 2007.]
Pendlex
[NB: S. 80K has been repealed by s. 271 of the Tax Administration Act 28 of 2011, a provision that will be put into operation by proclamation.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1
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INCOME TAX ACT – SECTIONS