Page 69 - SAIT Compendium 2016 Volume1

s 7A INCOME TAX ACT 58 OF 1962 s 8
‘pension’ means an annuity payable under any law or under the rules of a pension fund or provident fund or by an employer to a former employee of that employer or to the dependant or nominee of a deceased person who was employed by such employer;
[De nition of ‘pension’ substituted by s. 7 (1) (a) of Act 21 of 1995.]
‘salary’ means salary, wages or similar remuneration payable by an employer to an employee, but does not include any bonus or any amount referred to in subsection (4).
(2) Where any antedated salary or pension has been received by or has accrued to any person during any year or period of assessment and the period in respect of which such antedated salary or pension has become payable (hereinafter referred to as the accrual period) commenced before the commencement of the said year or period of assessment, such antedated salary or pension shall at the opinion of the taxpayer be deemed—
(a) if the accrual period commenced not more than two years before the commencement of the said year or period of assessment, to have been received by or to have accrued to the said person in part during each of the years or periods of assessment in which any portion of the accrual period falls (the part of the said amount relating to any such year or period of assessment being determined on the basis of a reasonable apportionment of the whole of the said amount between all the said years or periods of assessment); or
(b) if the accrual period commenced more than two years before the commencement of the rst-mentioned year or period of assessment, to have been received by or to have accrued to the said person in three equal annual instalments (the rst and second instalments two years and one year respectively before the date on which the said amount accrued to the said person and the third instalment on the said date).
(3) Where any member of the citizen force or of the commandos has bound himself to serve in such force or the commandos for a continuous period of service of at least eighteen months as contemplated in section 22 (6A) or 44 (5A) of the Defence Act, 1957 (Act 44 of 1957), the provisions of subsection (2) shall mutatis mutandis apply in respect of any gratuity which has become payable to him by the State upon and by reason of the completion of such period of service, as though such gratuity were antedated salary or pension granted permanently and with retrospective effect, in respect of the said period of service.
[Sub-s. (3) substituted by s. 7 (1) of Act 103 of 1976.]
(4) . . .
[Sub-s. (4) amended by s. 4 (1) (a) of Act 65 of 1986 and deleted by s. 8 (1) (a) of Act 129 of 1991.]
(4A) . . .
[Sub-s. (4A) inserted by s. 6 of Act 96 of 1981 and amended by s. 4 (1) (c) of Act 65 of 1986, by s. 8 (1) (b) of Act 129 of 1991, by s. 3 of Act 113 of 1993 and by s. 7 (1) (b), (c) and (d) of Act 21 of 1995 and deleted by s. 9 (1) of Act 7 of 2010.]
(5) . . .
[Sub-s. (5) deleted by s. 5 of Act 36 of 1996.] [S. 7A inserted by s. 6 of Act 69 of 1975.]
7B Timing of accrual and incurral of variable remuneration
(1) For the purposes of this section—
‘employee’ means an employee as de ned in paragraph 1 of the Fourth Schedule;
‘employer means an employer as de ned in paragraph 1 of the Fourth Schedule;
‘variable remuneration’ means—
(a) overtime pay, bonus or commission contemplated in
the de nition of ‘remuneration’ in paragraph 1 of the
Fourth Schedule;
(b) an allowance or advance paid in respect of transport
expenses as contemplated in section 8 (1) (b) (ii); or (c) any amount which an employer has during any year of assessment become liable to pay to an employee in consequence of the employee having during such year become entitled to any period of leave which had
not been taken by the employee during that year.
(2) In determining the taxable income derived by any person during a year of assessment, any amount to which an employee becomes entitled from an employer in respect
of variable remuneration is deemed to—
(a) accrue to the employee; and
(b) constitute expenditure incurred by the employer,
on the date during the year of assessment on which the amount is paid to the employee by the employer.
[S. 7B inserted by s. 8 (1) of Act 22 of 2012 – date of commencement: 1 March 2013; the insertion applies in respect of amounts accrued or expenditure incurred on or after that date.]
8 Certain amounts to be included in income or taxable income
(1) (a) (i) There shall be included in the taxable income
of any person (hereinafter referred to as the ‘recipient’) for any year of assessment any amount which has been paid or granted during that year by his or her principal as an allowance or advance, excluding any portion of any allowance or advance actually expended by that recipient— (aa)on travelling on business, as contemplated in
paragraph (b), unless an allowance or advance has been granted by an employer in respect of the use of a motor vehicle as contemplated in paragraph 7 of the Seventh Schedule; and
[Item (aa) substituted by s. 10 (1) (a) of Act 7 of 2010.] (bb) on any accommodation, meals and other incidental costs, as contemplated in paragraph (c), while such recipient is by reason of the duties of his or her of ce or employment obliged to spend at least one night away from his or her usual place of residence in the
Republic*; or
(cc) by reason of the duties attendant upon his or her
of ce, as contemplated in paragraph (d).
(ii) There shall not be included in the taxable income of a person in terms of the provisions of paragraph (a) (i), any amount paid or granted by a principal in reimbursement of, or as an advance for, any expenditure incurred or to be
incurred by the recipient—
(aa)on the instruction of his or her principal in the
furtherance of the trade of that principal; and (bb)where that recipient must produce proof to that principal that such expenditure was wholly incurred as aforesaid and must account to that principal for
that expenditure:
* The amounts determined in the Determination of Daily Allowance in respect of Meals and Incidental Costs (see under Regulations in Volume 2) apply in respect of the year of assessment commencing 1 March 2015 – GN 98 in GG 38476 of 25 February 2015.
SAIT CompendIum oF TAx LegISLATIon VoLume 1 61
INCOME TAX ACT – SECTIONS