Page 64 - SAIT Compendium 2016 Volume1

s 6quat INCOME TAX ACT 58 OF 1962
s 6quat
be carried forward to the immediately succeeding year of assessment and shall be deemed to be a tax on income paid to the government of any other country in that year; and
be set off against the amount of any normal tax payable by that resident during that year of assessment in respect of any amount derived from any other country which is included in the taxable income of that resident during that year, as contemplated in subsection (1), after any tax payable to the government of any other country in respect of any amount so included during such year of assessment which may be deducted in terms of subsections (1) and (1A), has been deducted from the amount of such normal tax payable in respect of such amount so included; and
(ii) for the purposes of this subsection, the amount so included in such resident’s taxable income must be determined without regard to section 10B (3).
[Proviso to sub-s. (1A) substituted by s. 3 (1) (a) of Act 22
of 2012 – date of commencement: see footnote below*.]
[Sub-s. (1A) amended by s. 8 (c) and (f) of Act 5 of 2001, by s. 9 (1) (c) of Act 74 of 2002 and by s. 3 (1) (a) of Act 22 of 2012.]
(1B) Notwithstanding the provisions of subsection (1A)—
(aa)
(bb)
(a)
the rebate or rebates of any tax proved to be payable as contemplated in subsection (1A), shall not in aggregate exceed an amount which bears to the total normal tax payable the same ratio as the total taxable income attributable to the income, proportional amount, taxable capital gain or amount, as the case may be, which is included as contemplated in subsection (1), bears to the total taxable income: Provided that—
(i) in determining the amount of the taxable income that is attributable to that income, proportional amount, taxable capital gain or amount, any allowable deductions contemplated in sections 11 (n), 18 and 18A must be deemed to have been incurred proportionately in respect of income derived from sources within and outside the Republic;
[Sub-para. (i) substituted by s. 11 (1) (d) of Act 24 of 2011 – date of commencement: 1 January 2012. This substitution applies in respect of years of assessment commencing on or after that date.]
[Sub-para. (ii) amended by s. 16 (1) (h) of Act 45 of 2003 and by s. 8 (b) of Act 31 of 2005.]
(iii) the excess amount shall not be allowed to be carried forward for more than seven years reckoned from the year of assessment when such excess amount was for the rst time carried forward.
[Para. (a) substituted by s. 9 (1) (g) of Act 74 of 2002 and amended by s. 16 (1) (f) of Act 45 of 2003 and by s. 11 (1) (c) of Act 24 of 2011 – date of commencement: 1 January 2012. This amendment applies in respect of years of assessment commencing on or after that date.]
(b) . . . (c) . . .
[Para. (c) amended by s. 9 (1) (h) of Act 74 of 2002 and
deleted by s. 16 (1) (i) of Act 45 of 2003.] (d) . . .
[Para. (d) amended by s. 9 (1) (i) of Act 74 of 2002 and deleted by s. 16 (1) (i) of Act 45 of 2003.]
(e) . . .
[Para. (e) substituted by s. 16 (1) (j) of Act 45 of 2003 and by s. 4 (1) of Act 32 of 2004 and deleted by s. 7 (b) of Act
35 of 2007.]
(1C) (a) For the purpose of determining the taxable income derived by any resident from carrying on any trade, there may at the election of the resident be allowed as a deduction from the income of such resident so derived the sum of any taxes on income (other than taxes contemplated in subsection (1A)) paid or proved to be payable by that resident to any sphere of government of any country other than the Republic, without any right of recovery by any person other than in terms of a mutual agreement procedure in terms of an international tax agreement or a right of recovery in terms of any entitlement to carry back losses arising during any year of assessment to any year of assessment prior to such year of assessment.
(b) Where, during any year of assessment, any amount was deducted in terms of this section from the normal tax payable by a resident and, in any year of assessment subsequent to that year of assessment, that resident receives any amount by way of refund in respect of the amount so deducted or is discharged from any liability in respect of that amount, so much of the amount so received or so much of the amount of that discharge as does not exceed that amount must be deemed to be an amount
(iA) the taxes contemplated in subsection (1A) (b) that are attributable to any proportional amount which— (aa) . . .
[Item (aa) deleted by s. 11 (1) (e) of Act 24 of 2011 – date of commencement: 1 April 2012. This deletion applies in respect of years of assessment commencing on or after that date.]
(bb) relates to any amount contemplated in sec- tion 9D (9A) (a) which is not excluded from the application of section 9D (2) in terms of that section or section 9D (9) (b),
[Item (bb) substituted by s. 11 (1) (f) of Act 24 of 2011 –
date of commencement: 1 April 2012. This substitution applies in respect of years of assessment commencing on or after that date.]
shall in aggregate be limited to the amount of the normal tax which is attributable to those proportional amounts;
[Sub-para. (iA) inserted by s. 16 (1) (g) of Act 45 of 2003.] (iB)the taxes contemplated in subsection (1A) (a) (iii) which are attributable to any taxable capital gain in respect of an asset which is not attributable to a permanent establishment of the resident outside the Republic, must in aggregate be limited to the amount of normal tax which is
attributable to that taxable capital gain;
[Sub-para. (iB) inserted by s. 8 (a) of Act 31 of 2005.] (ii) where the sum of any such taxes proved to be payable (excluding any taxes contemplated in paragraphs (iA) and (iB) of this proviso) exceeds the rebate as so determined (hereinafter referred to
as the excess amount), that excess amount may—
(a) (b)
insofar as it applies to any person that is a natural person, deceased estate, insolvent estate or trust, on 1 March 2012 and applies in respect of foreign dividends received or accrued on or after that date; and
insofar as it applies to any person that is a person other than a natural person, deceased estate, insolvent estate or trust, on 1 April 2012 and applies in respect of foreign dividends received or accrued on or after that date.
* Section 3 (1) (a) is deemed to have come into operation—
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SAIT CompendIum oF TAx LegISLATIon VoLume 1