Page 331 - SAIT Compendium 2016 Volume1

Fourth Schedule INCOME TAX ACT 58 OF 1962 Fourth Schedule
[Sub-para. (4) amended by s. 23 (b) of Act 72 of 1963, substituted by s. 29 (1) (b) of Act 55 of 1966 and by s. 48 of Act 85 of 1974, amended by s. 28 of Act 113 of 1977, substituted by s. 40 of Act 90 of 1988, amended by s. 21 of Act 70 of 1989, by s. 45 (b) of Act 129 of 1991 and by s. 38 of Act 21 of 1995 and substituted by s. 21 (1) (a) of Act 16 of 2004.]
(5) (a) The Commissioner shall on application made to him by any person who is a labour broker or who is an employee by reason of the provisions of paragraph (d) of the de nition of ‘employee’ in paragraph 1, issue to such person a certi cate of exemption if—
(i) such person carries on an independent trade and is registered as a provisional taxpayer under the provisions of paragraph 17;
(ii) in the case of any such labour broker, he is registered as an employer under the provisions of paragraph 15; and
(iii) such person has, subject to any extension granted by the Commissioner, submitted all such returns as are required
to be submitted by him under this Act:
Provided that the Commissioner shall not issue a certi cate of exemption if—
(aa) more than 80 per cent of the gross income of such person during the year of assessment consists of, or is likely
to consist of, an amount or amounts received from any one client of such person, or any associated institution as de ned in the Seventh Schedule to this Act in relation to such client, unless that person is a labour broker who throughout the year of assessment employs three or more full-time employees—
(A) who are on a full-time basis engaged in the business of that labour broker of providing persons to or procuring
persons for clients of that labour broker; and
(B) who are not connected persons in relation to that labour broker;
[Sub-para. (aa) substituted by s. 21 (1) (b) of Act 16 of 2004 and amended by s. 55 (1) (b) of Act 8 of 2007.]
(bb) such labour broker provides to any of its clients the services of any other labour broker; or
(cc) such labour broker is contractually obliged to provide a speci ed employee of such labour broker to render any
service to such client.
[Para. (a) amended by s. 53 (1) of Act 30 of 2000.]
(b) The certi cate of exemption referred to in item (a) shall be issued in such form as the Commissioner may decide
and shall be valid for such period as the Commissioner may indicate thereon.
(c) An employer shall not be required to deduct or withhold employees’ tax from any remuneration paid or payable by him
to any person who produces to the employer a valid certi cate of exemption issued by the Commissioner under item (a). [Sub-para. (5) added by s. 45 of Act 101 of 1990.]
(6) Any amount included in gross income in terms of paragraph (eA) of the de nition of ‘gross income’ shall for the purposes of this Schedule be deemed to be an amount which an employer pays or becomes liable to pay by way of
remuneration to an employee.
[Sub-para. (6) added by s. 45 (1) of Act 28 of 1997.]
3. (1) The liability of any employer to deduct or withhold any amount of employees’ tax in terms of paragraph 2 shall not be reduced or extinguished by reason of the fact that the employer has a right or is otherwise than in terms of any law under an obligation to deduct or withhold any other amount from the employees’ remuneration, and such right or obligation shall notwithstanding anything to the contrary in any other law contained, for all purposes be deemed to have reference only to the amount of the remuneration remaining after the amount of employees’ tax referred to in that paragraph has been deducted or withheld.
(2) The provisions of paragraph 2 shall apply in respect of all amounts payable by way of remuneration, notwithstanding the provisions of any law which provide that any such amount shall not be reduced or shall not be subject to attachment. 4. Any amount required to be deducted or withheld in terms of paragraph 2 shall be a debt due to the State and the employer concerned shall save as otherwise provided be absolutely liable for the due payment thereof to the Commissioner. 5. (1) Subject to the provisions of subparagraph (6), if an employer is personally liable for the payment of employees’ tax under Chapter 10 of the Tax Administration Act, the employer shall pay that amount to the Commissioner not later than the date on which payment should have been made if the employees’ tax had in fact been deducted or withheld in terms of paragraph 2.
[Sub-para. (1) substituted by s. 19 (a) of Act 18 of 2009 and by s. 271 of Act 28 of 2011 – date of commencement: 1 October 2012.]
(1A) The liability of the employer as contemplated in paragraph 2 must be deemed to have been discharged if the employer made payment of the outstanding employees’ tax in terms of subparagraph (1).
[Sub-para. (1A) inserted by s. 19 (b) of Act 18 of 2009.]
(2) Where the employer has failed to deduct or withhold employees’ tax in terms of paragraph 2 and the Commissioner
is satis ed that the failure was not due to an intent to postpone payment of the tax or to evade the employer’s obligations under this Schedule, the Commissioner may, if he is satis ed that there is a reasonable prospect of ultimately recovering the tax from the employee, absolve the employer from his liability under subparagraph (1) of this paragraph.
(3) An employer who has not been absolved from liability as provided in subparagraph (2) shall have a right of recovery against the employee in respect of the amount paid by the employer in terms of subparagraph (1) in respect of that employee, and such amount may in addition to any other right of recovery be deducted from future remuneration which may become payable by the employer to that employee, in such manner as the Commissioner may determine. [NB: Sub-paras. (2) and (3) have been substituted by s. 7 (1) of Tax Administration Laws Amendment Act, 2015, provisions that will come into operation on a date to be determined by the Minister by notice in the Gazette. See Pendlex below.]
Pendlex (to come into operation on a date to be determined by the Minister by notice in the Gazette)
(2) Where the employer has failed to deduct or withhold employees’ tax in terms of paragraph 2 and the failure was not due to an intent to postpone payment of the tax or to evade the employer’s obligations under this Schedule, the Commissioner may, on application in the prescribed form and manner by the employer and if he or she is satis ed that there is a reasonable prospect of ultimately recovering the tax from the employee, absolve the employer from the
employer’s liability under subparagraph (1) of this paragraph.
SAIT CompendIum oF TAx LegISLATIon VoLume 1 323
INCOME TAX ACT – SCHEDULES