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Tenth Schedule INCOME TAX ACT 58 OF 1962 Tenth Schedule
‘gas’ means any subsoil combustible gas, consisting primarily of hydrocarbons, other than hydrocarbons converted from bituminous shales or other strati ed deposits of solid hydrocarbons;
[De nition of ‘gas’ substituted by s. 70 (1) (a) of Act 8 of 2007.]
‘oil’ means any subsoil combustible liquid consisting primarily of hydrocarbons, other than hydrocarbons converted
from bituminous shales or other strati ed deposits of solid hydrocarbons; ‘oil and gas company’ means any company that—
(i) holds any oil and gas right; or
(ii) engages in exploration or post-exploration in terms of any oil and gas right;
[Sub-para. (ii) substituted by s. 154 (1) (b) of Act 31 of 2013 – date of commencement: 1 April 2014; the substitution applies in respect of years of assessment commencing on or after that date.]
[De nition of ‘oil and gas company’ substituted by s. 84 (a) of Act 17 of 2009.] ‘oil and gas income’ means the receipts and accruals derived by an oil and gas company from—
(a) exploration in terms of any oil and gas right;
(b) post-exploration in respect of any oil and gas right; or
[Para. (b) substituted by s. 154 (1) (c) of Act 31 of 2013 – date of commencement: 1 April 2014; the substitution applies in
respect of years of assessment commencing on or after that date.] (c) the leasing or disposal of any oil and gas right;
[De nition of ‘oil and gas income’ substituted by s. 84 (b) of Act 17 of 2009.] ‘oil and gas right’ means—
(a) any reconnaissance permit, technical co-operation permit, exploration right, or production right as de ned in section 1 of the Mineral and Petroleum Resources Development Act or any interest therein;
[Para. (a) substituted by s. 154 (1) (d) of Act 31 of 2013 (date of commencement: 12 December 2013) and by s. 154 (1) (e) of Act 31 of 2013 – date of commencement: 1 April 2014; the substitution applies in respect of years of assessment commencing on or after that date.]
(b) any exploration right acquired by virtue of a conversion contemplated in item 4 of Schedule II to the Mineral and Petroleum Resources Development Act or any interest therein; or
[Para. (b) substituted by s. 154 (1) (d) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(c) any production right acquired by virtue of a conversion contemplated in item 5 of Schedule II to the Mineral and
Petroleum Resources Development Act or any interest therein;
[Para. (c) substituted by s. 154 (1) (d) of Act 31 of 2013 – date of commencement: 12 December 2013.] [De nition of ‘oil and gas right’ substituted by s. 87 (1) (c) of Act 35 of 2007 and by s. 113 (1) of Act 7 of 2010.]
‘post-exploration’ means any activity carried out after the completion of the appraisal phase, including—
[Words preceding para. (a) substituted by s. 154 (1) (f) of Act 31 of 2013 – date of commencement: 1 April 2014; the
substitution applies in respect of years of assessment commencing on or after that date.] the separation of oil and gas condensates;
(a)
(b)
(c)
to the extent that these processes are preliminary to re ning.
the drying of gas; and
the removal of non-hydrocarbon constituents,
[De nition of ‘post-exploration’, previously ‘production’, substituted by s. 84 (c) of Act 17 of 2009.]
‘re ning’ . . .
[De nition of ‘re ning’ amended by s. 70 (1) (c) of Act 8 of 2007 and by s. 65 (1) of Act 3 of 2008 and deleted by s. 84 (d)
of Act 17 of 2009.]
2 Rate
The rate of tax on taxable income attributable to oil and gas income of any oil and gas company must not exceed 28 cents on each rand of taxable income.
[Para. 2 amended by s. 71 (1) (a) and (b) of Act 8 of 2007 and by s. 90 (1) (a) and (b) of Act 60 of 2008 and substituted by s. 137 (1) of Act 22 of 2012 and by s. 155 of Act 31 of 2013 – date of commencement: 12 December 2013.]
3 Withholding taxes
[Heading substituted by s. 156 (1) (a) of Act 31 of 2013 – date of commencement: 12 December 2013.]
(1) The rate of dividends tax contemplated in section 64E that is paid by an oil and gas company on the amount of any
dividend derived from oil and gas income must not exceed zero per cent of the amount of that dividend.
[Sub-para. (1) substituted by s. 156 (1) (b) of Act 31 of 2013 – date of commencement deemed to have been 1 April 2012; the substituted subparagraph applies in respect of amounts paid on or after that date.]
(2) Notwithstanding Part IVB of Chapter II, the rate of withholding tax on interest contemplated in that Part may not exceed zero per cent of the amount of any interest that is paid by an oil and gas company in respect of loans applied to fund expenditure contemplated in paragraph 5 (2).
[Sub-para. (2) substituted by s. 156 (1) (c) of Act 39 of 2013 – date of commencement: 1 January 2015; the substitution applies iro interest that is paid or that becomes due and payable on or after that date.]
[Para. 3 amended by s. 72 (1) of Act 8 of 2007 and by s. 85 of Act 17 of 2009 and substituted by s. 138 (1) of Act 22 of 2012 – date of commencement deemed to have been 1 April 2012.]
4 Foreign currency gains or losses
(1) Currency gains or losses of an oil and gas company during any year of assessment (regardless of whether those gains or losses are realised or unrealised) must be determined solely with reference to—
(a) the functional currency of that company; and
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SAIT CompendIum oF TAx LegISLATIon VoLume 1