Page 36 - SAIT Compendium 2016 Volume1

s 1 INCOME TAX ACT 58 OF 1962 s 1
‘foreign return of capital’ means any amount that is paid or payable by a foreign company in respect of any share in that foreign company where that amount is treated as a distribution or similar payment (other than an amount that constitutes a foreign dividend) by that foreign company for the purposes of the laws relating to—
(a) tax on income on companies of the country in which
that foreign company has its place of effective
management; or
(b) companies of the country in which that foreign
company is incorporated, formed or established, where that country in which that foreign company has its place of effective management does not have any applicable laws relating to tax on income,
but does not include any amount so paid or payable to the extent that the amount so paid or payable—
(i) is deductible by that foreign company in the determination of any tax on income of companies of the country in which that foreign company has its place of effective management; or
‘government scrapping payment’ . . .
[De nition of ‘government scrapping payment’ inserted by
s. 3 (1) (g) of Act 20 of 2006 and deleted by s. 2 (1) (l) of Act 22 of 2012 – date of commencement: 1 January 2013; the deletion applies in respect of years of assessment commencing on or after that date.]
‘gross income’, in relation to any year or period of assessment, means—
(i) in the case of any resident, the total amount, in cash or otherwise, received by or accrued to or in favour of such resident; or
(ii) in the case of any person other than a resident, the total amount, in cash or otherwise, received by or accrued to or in favour of such person from a source within the Republic,
[Wording of para. (ii) substituted by s. 2 (1) (m) of Act
22 of 2012 – substitution deemed to have come into operation on 1 January 2012 and applies in respect of amounts received or accrued during years of assessment commencing on or after that date.]
during such year or period of assessment, excluding receipts or accruals of a capital nature, but including, without in any way limiting the scope of this de nition, such amounts (whether of a capital nature or not) so received or accrued as are described hereunder, namely—
(a) any amount received or accrued by way of annuity, including any amount contemplated in the de nition of ‘living annuity’ or the de nition of ‘annuity amount’ in section 10A (1), other than an amount contemplated in paragraph (d) (ii);
[Para. (a) substituted by s. 2 (1) (e) of Act 113 of 1993, by s. 2 (1) (k) of Act 3 of 2008 and by s. 2 (1) (n) of Act 22 of 2012 – substitution deemed to have come into operation on 1 March 2012 and applies in respect of amounts received or accrued on or after that date.]
(ii)
constitutes shares in that foreign company;
[Words following para. (b) substituted by s. 2 (1) (i) of Act 22 of 2012 – substitution deemed to have come into operation on 1 January 2011 and applies in respect of amounts paid or that became payable on or after that date.]
[De nition of ‘foreign return of capital’ inserted by
s. 7 (1) (m) of Act 24 of 2011 and amended by s. 2 (1) (i) of Act 22 of 2012 – date of commencement: 1 January 2011.]
‘foreign tax year’, in relation to a foreign company, means any year or period of reporting for foreign income tax purposes by that company or, if that company is not subject to foreign income tax, any annual period of nancial reporting by that company;
[De nition of ‘foreign tax year’ inserted by s. 2 (1) (j) of Act 22 of 2012 – insertion deemed to have come into operation on 1 January 2012 and applies in respect of foreign tax years ending during years of assessment commencing on or after that date.]
‘functional currency’, in relation to—
(a) a person, means the currency of the primary economic
environment in which the business operations of that
person are conducted; and
(b) a permanent establishment of any person, means
the currency of the primary economic environment in which the business operations of that permanent establishment are conducted;
[De nition of ‘functional currency’ inserted by s. 6 (1) (k) of Act 7 of 2010.]
‘government grant’ . . .
[De nition of ‘government grant’ inserted by s. 3 (1) (e) of
Act 32 of 2005 and deleted by s. 2 (1) (k) of Act 22 of 2012 – date of commencement: 1 January 2013; the deletion applies in respect of years of assessment commencing on or after that date.]
(b)
any amount payable to the taxpayer—
(i) by the spouse or former spouse of that taxpayer,
under any judicial order or written agreement of separation or under any order of divorce, by way of alimony or allowance or maintenance of the taxpayer; or
(ii) in terms of any maintenance order for the maintenance of a child as contemplated in section 15 (1) of the Maintenance Act, 1998 (Act 99 of 1998);
(a) (b)
in the case of any foreign partnership that is established or formed before 24 August 2010, as from the commencement of years of assessment commencing on or after 1 October 2011; and
in the case of any foreign partnership that is established or formed on or after 24 August 2010, as from the date of establishment or formation.’
‘(5) Paragraph (l) of subsection (1) is deemed to have come into operation—
[Para. (b) substituted by s. 5 (1) (q) of Act 35 of 2007.] (c) any amount, including any voluntary award, received or accrued in respect of services rendered or to be rendered or any amount (other than an amount referred to in section 8 (1)) received or accrued in respect of any employment or the holding of any
of ce: Provided that—
[Words in para. (c) preceding sub-para. (i) substituted by s. 7 (1) (n) of Act 24 of 2011 – date of commencement: 1 April 2012.]
28
SAIT CompendIum oF TAx LegISLATIon VoLume 1