Page 399 - SAIT Compendium 2016 Volume1

Eighth Schedule INCOME TAX ACT 58 OF 1962 Eighth Schedule [Item (b) substituted by s. 114 (a) of Taxation Laws Amendment Act, 2015 (‘that person to acquire’ replaced by ‘the
person acquiring’) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.] [Sub-para. (5) amended by s. 101 (1) (f) of Act 45 of 2003 and substituted by s. 88 (1) (a) of Act 43 of 2014 – date of
commencement: 1 January 2015.]
[Sub-para. (5A) inserted by s. 101 (1) (g) of Act 45 of 2003 and deleted by s. 136 (1) (d) of Act 31 of 2013 – date of
commencement: 12 December 2013; the deletion applies iro disposals made on or after that date.]
(6) Where a person has adopted the market value as the valuation date value of any asset contemplated in this paragraph, that market value must be determined in the currency of the expenditure incurred to acquire that asset and for purposes
of the application of subparagraph (1A) be translated to the local currency by applying the spot rate on valuation date.
[Sub-para. (6) amended by s. 75 (1) (e) of Act 31 of 2005 and substituted by s. 136 (1) (e) of Act 31 of 2013 (date of commencement: 12 December 2013; the substitution applies iro disposals made on or after that date), by s. 88 (1) (b) of Act 43 of 2014 (date of commencement: 1 January 2015) and by s. 114 (b) of Taxation Laws Amendment Act, 2015 (‘for purposes of the application of subparagraph (1A) be’ inserted) – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(6A) Subparagraph (1A) must not apply in respect of the disposal by a person of—
[Words preceding item (a) substituted by s. 136 (1) (f) of Act 31 of 2013 – date of commencement: 12 December 2013; the substitution applies iro disposals made on or after that date.]
(a) . . .
[Item (a) deleted by s. 136 (1) (g) of Act 31 of 2013 – date of commencement: 12 December 2013; the deletion applies iro
disposals made on or after that date.]
(b) any amount of a debt owed to that person denominated in a foreign currency; or
[Item (b) substituted by s. 136 (1) (h) of Act 31 of 2013 – date of commencement: 12 December 2013; the substitution
applies iro disposals made on or after that date.]
(c) any right of that person arising from any contractual agreement or arrangement to which that person and another
party are parties where—
(i) that contractual agreement or arrangement gives rise to that right and to a corresponding obligation of the other
party; and
(ii) the value of that right and the amount of that obligation are determined directly or indirectly with reference to
an amount contemplated in item (b).
[Subitem (ii) substituted by s. 136 (1) (i) of Act 31 of 2013 – date of commencement: 12 December 2013; the substitution
applies iro disposals made on or after that date.]
[Sub-para. (6A) inserted by s. 117 (1) (d) of Act 22 of 2012 – date of commencement: 1 March 2013 (the original commencement date of the said s. 117 (1) (d) (‘1 January 2013’) was retrospectively replaced by s. 208 (1) of Act 31 of 2013); this inserted subparagraph applies iro disposals made on or after that date.]
(7) For the purposes of this paragraph—
‘foreign currency’ means currency other than local currency; and ‘local currency’ means—
(a) in relation to a permanent establishment of a person, the functional currency of that permanent establishment (other than the currency of any country in the common monetary area);
(b) in relation to a headquarter company, in respect of amounts which are not attributable to a permanent establishment outside the Republic, the functional currency of that headquarter company;
[Item (b) substituted by s. 136 (1) (j) of Act 31 of 2013 – substitution deemed to have come into operation on 27 February 2013 and applies iro years of assessment commencing on or after that date.]
(c) in relation to a domestic treasury management company, in respect of amounts which are not attributable to a permanent establishment outside the Republic, the functional currency of that domestic treasury management company;
[Item (c) substituted by s. 136 (1) (l) of Act 31 of 2013 – date of commencement: 1 April 2014; the substitution applies iro years of assessment commencing on or after that date.]
(d) in relation to an international shipping company de ned in section 12Q, in respect of amounts which are not attributable to a permanent establishment outside the Republic, the functional currency of that international shipping company; or
[Item (d) added by s. 136 (1) (l) of Act 31 of 2013 – date of commencement: 1 April 2014; the addition applies iro years of assessment commencing on or after that date.]
(e) in any other case, the currency of the Republic.
[Item (e) added by s. 136 (1) (l) of Act 31 of 2013 – date of commencement: 1 April 2014; the addition applies iro years of
assessment commencing on or after that date.]
[De nition of ‘local currency’ amended by s. 101 (1) (h) of Act 45 of 2003 and substituted by s. 100 (1) (b) of Act 7 of 2010.] [Para. 43 substituted by s. 84 (1) of Act 74 of 2002.]
43A Dividends treated as proceeds on disposal of certain shares
(1) For the purposes of this section, ‘exempt dividend’ means any dividend or foreign dividend to the extent that the dividend or foreign dividend is—
(a) not subject to any tax under Part VIII of Chapter II; and
(b) exempt from normal tax in terms of section 10 (1) (k) (i) or section 10B (2) (a) or (b).
(2) The proceeds from the disposal by a taxpayer that is a company of shares in another company must be increased by an amount equal to the amount of any exempt dividend received by or accrued to that taxpayer in respect of any share held by the taxpayer in that other company—
SAIT CompendIum oF TAx LegISLATIon VoLume 1 391
(5A) . . .
INCOME TAX ACT – SCHEDULES