Page 70 - SAIT Compendium 2016 Volume1

s 8 INCOME TAX ACT 58 OF 1962 s 8
Provided that where that expenditure was incurred to acquire any asset, the ownership in that asset must vest in that principal.
(iii) For the purposes of this paragraph, ‘principal’ in relation to a recipient includes his or her employer or the authority, company, body or other organisation in relation to which any of ce is held, or any associated institution, as de ned in the Seventh Schedule, in relation to such employer, authority, company, body or organisation.
(iv) The provisions of this paragraph shall not apply in respect of any amount paid or granted as an allowance or advance that is received by or accrued to a person in respect of—
(aa)the holding of a public of ce by that person as
contemplated in section 9 (2) (g); or
(bb) services rendered or work or labour performed by that
person as contemplated in section 9 (2) (h),
if that person is stationed outside the Republic and that amount is attributable to services rendered by that person outside the Republic.
[Sub-para. (iv) added by s. 11 (1) (a) of Act 74 of 2002 and substituted by s. 9 (1) (a) 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.]
[Para. (a) substituted by s. 6 (a) of Act 141 of 1992 and by s. 12 (1) (a) of Act 30 of 2002.]
(b) For the purposes of paragraph (a) (i) (aa)—
(i)any allowance or advance in respect of transport expenses shall, to the extent to which such allowance or advance has been expended by the recipient on private travelling (including travelling between his or her place of residence and his or her place of employment or business or any other travelling done for his or her private or domestic purposes), be deemed not to have been actually expended on
travelling on business;
[Sub-para. (i) amended by s. 4 (a) of Act 96 of 1985, by s. 9 (a) of Act 129 of 1991 and by s. 5 (1) (a) of
Act 43 of 2014 – date of commencement: 20 January 2015.]
(ii)subject to the provisions of subparagraph (iii), where such allowance or advance has been paid to the recipient in order that it may be utilized for defraying expenditure in respect of any motor vehicle used by the recipient, the portion of the allowance expended by the recipient during the year of assessment for business purposes shall, unless an acceptable calculation based on accurate data is furnished by the recipient, be deemed to be an amount calculated by applying the rate per kilometre* determined in the manner prescribed by the Minister of Finance by notice in the Gazette for the category of vehicle used, on a distance travelled during the said year for business purposes (other than private travelling as contemplated in subparagraph (i));
[Sub-para. (ii) substituted by s. 6 (a) of Act 85 of 1987 and amended by s. 9 (b) of Act 129 of 1991, by s. 8 (1) (a) of Act 21 of 1995, by s. 6 (1) (a) of Act 28 of 1997, by s. 24 (1) of Act 30 of 1998, by s. 4 (a) of Act 9 of 2005, by s. 21 of Act 9 of 2006, by s. 11 (1) (a) of Act 17 of 2009 and by s. 10 (1) (b) of Act 7 of 2010.]
(iii) where such allowance or advance is based on the actual distance travelled by the recipient in using a motor vehicle on business (excluding the said private travelling), or such actual distance is proved
to the satisfaction of the Commissioner to have been travelled by the recipient, the amount expended by the recipient on such business travelling shall, unless the contrary appears, be deemed to be an amount determined on such actual distance at the rate per kilometre* xed by the Minister of Finance by notice in the Gazette for the category of vehicle used;
(iiiA) where the portion of the allowance or advance which is claimed by the recipient to be actually expended is calculated based on accurate data furnished by the recipient in respect of any vehicle—
(aa) in the case of a vehicle that is being leased, the total amount of payments in respect of that lease may not in any year of assessment exceed an amount of the xed cost determined by the Minister in the notice contemplated in subparagraph (ii), for the category of vehicle used;
(bb) in any other case—
(A) the wear and tear of that vehicle must be
determined over a period of seven years from the date of original acquisition by that recipient and the cost of the vehicle must for this purpose be limited to R560 000, or such other amount determined by the Minister by notice in the Gazette; and
(B) the nance charges in respect of any debt incurred in respect of the purchase of that vehicle must be limited to an amount which would have been incurred had the original debt been R560 000, or such other amount determined by the Minister in terms of subitem (A);
[Item (bb) amended by s. 2 (2) (b) of Act 8 of 2007 and by s. 1 (2) (c) of Act 3 of 2008 and substituted by s. 16 (1) (a) of Act 24 of 2011 (date of commencement: 1 March 2011) and by s. 5 (1) of Act 42 of 2014 – date of commencement deemed to have been 1 March 2014. The substitution applies iro years of assessment commencing on or after that date.]
[Sub-para. (iiiA) inserted by s. 4 (b) of Act 9 of 2005.] (iv) where any motor vehicle which is owned or leased by an employee, his spouse or his child, whether directly or indirectly by virtue of an interest in a company or trust or otherwise, has been let to the employer or any associated institution in relation to the employer, the sum of the rental paid by the employer or associated institution and any expenditure defrayed by the employer or associated institution in respect of the vehicle, shall be deemed to be an allowance paid to the employee in respect of transport expenses, and in such case the said rental shall for the purposes of this Act (excluding this paragraph) be deemed not to have been received by or to have accrued to the lessor of such motor vehicle, and for the purposes of paragraph 2 (b) of the Seventh Schedule such employee shall be deemed not to have been granted the right to use such
motor vehicle.
[Sub-para. (iv) added by s. 5 (1) (a) of Act 101 of 1990.] [Para. (b) amended by s. 12 (1) (b) of Act 30 of 2002.]
(c) A recipient shall, for the purposes of paragraph (a) (i) (bb), be deemed to have actually expended—
(i) where that recipient proves to the Commissioner the amount of the expenses incurred by him or her in respect of accommodation, meals or other incidental costs (other than any amount of expenditure borne by the employer otherwise than by way of payment
* Rate xed by GN 175 in GG 38516 of 27 February 2015.
62 SAIT CompendIum oF TAx LegISLATIon VoLume 1