Page 95 - SAIT Compendium 2016 Volume1

s 9D INCOME TAX ACT 58 OF 1962 s 9F
(ii) item (bb) of paragraph (a) (i), in determining whether an amount is attributable to a permanent establishment of a controlled foreign company— (aa) that permanent establishment must be treated as
if that permanent establishment were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the controlled foreign company of which it is a permanent establishment; and
(bb)that determination must be made as if the amount arose in the context of a transaction, operation, scheme, agreement or understanding that was entered into on the terms and conditions that would have existed had the parties to that transaction been independent persons dealing at arm’s length;
(iii) items (aa) and (bb) of paragraph (a) (iii), where the principal trading activities of a foreign business establishment do not constitute the activities of a treasury operation, the principal trading activities of that foreign business establishment must be deemed to constitute the activities of a treasury operation where— (aa)less of those principal trading activities are
conducted in the country in which the foreign business establishment is located than in any other single country;
(bb) those principal trading activities do not involve the regular and continuous acceptance of deposits from or the provision of credit to clients who are not connected persons in relation to that controlled foreign company; or
(cc) less than 50 per cent of the amounts attributable to the activities of the foreign business establishment are derived from those principal trading activities with respect to clients who are not connected persons in relation to that controlled foreign company;
(iv) items (aa) and (bb) of paragraph (a) (iii) and paragraph (a) (vii), where the principal trading activities of a foreign business establishment do not constitute the activities of a captive insurer, the principal trading activities of that foreign business establishment must be deemed to constitute the activities of a captive insurer where—
(aa)less of those principal trading activities are conducted in the country in which that foreign business establishment is located than in any other single country;
(bb) those principal trading activities do not involve the regular transaction of business as an insurer with clients who are not connected persons in relation to that controlled foreign company; or
(cc) less than 50 per cent of the amounts attributable to activities of that foreign business establishment are derived from those principal trading activities with respect to clients who are not connected persons in relation to that controlled foreign company; and
(v) paragraph (a) (iv), ‘operating lease’ means a lease of movable property concluded by a lessor in the ordinary course of business of letting such property if—
(aa) such property may be hired by members of the
general public directly from that lessor in terms of
such a lease, for a period of no more than ve years; (bb) either—
(A) the cost of maintaining such property and of carrying out repairs thereto required in
consequence of normal wear and tear is
ultimately borne by the lessor; or
(B) the activities of maintaining and repairing such property that are required in consequence of normal wear and tear are
performed by the lessor; and
(cc) subject to any claim that the lessor may have
against the lessee by reason of the lessee’s failure to take proper care of the property, the risk of destruction or loss of or other disadvantage to such property is not assumed by the lessee.
[Sub-s. (9A) inserted by s. 25 (1) (k) of Act 24 of 2011 – date of commencement: 1 April 2012. This subsection applies in respect of foreign tax years of controlled foreign companies ending during years of assessment commencing on or after that date.]
(10) . . .
[Sub-s. (10) substituted by s. 9 (1) (o) of Act 20 of 2006, amended by s. 9 (1) (f), (g), (h) and (i) of Act 8 of 2007, by s. 15 (1) (j) and (k) of Act 35 of 2007, by s. 13 (1) (e), (f) and (g) of Act 60 of 2008 and by s. 12 (1) (d) and (e) of Act 17 of 2009 and deleted by s. 25 (1) (l) of Act 24 of 2011 – date of commencement: 1 April 2012. The deletion of this subsection applies in respect of foreign tax years of controlled foreign companies ending during years of assessment commencing on or after that date.]
(11) . . .
[Sub-s. (11) deleted by s. 22 (1) (p) of Act 45 of 2003.]
(12) . . .
[Sub-s. (12) added by s. 22 (1) (q) of Act 45 of 2003, substituted by s. 14 (1) (q) of Act 31 of 2005 and deleted by s. 25 (1) (l) of Act 24 of 2011 – date of commencement: 1 April 2012. The deletion of this subsection applies in respect of foreign tax years of controlled foreign companies ending during years of assessment commencing on or after that date.]
(13) . . .
[Sub-s. (13) added by s. 22 (1) (q) of Act 45 of 2003, substituted by s. 14 (1) (q) of Act 31 of 2005 and deleted by s. 25 (1) (l) of Act 24 of 2011 – date of commencement: 1 April 2012. The deletion of this subsection applies
in respect of foreign tax years of controlled foreign companies ending during years of assessment commencing on or after that date.]
(14) . . .
[Sub-s. (14) added by s. 25 (1) (m) of Act 24 of 2011 and deleted by s. 25 (1) (n) of Act 24 of 2011– date of commencement: 1 April 2012. The deletion of this subsection applies in respect of foreign tax years of controlled foreign companies ending during years of assessment commencing on or after that date.]
[S. 9D inserted by s. 9 (1) of Act 28 of 1997, amended by s. 10 (1) (p) of Act 59 of 2000 and substituted by s. 14 (1) of Act 74 of 2002.]
9E . . .
[S. 9E inserted by s. 20 (1) of Act 30 of 2000, amended by s. 11 (1) of Act 59 of 2000, substituted by s. 15 (1) of Act 74 of 2002 and repealed by s. 23 (1) of Act 45 of 2003.]
[NB: A s. 9E was inserted by s. 14 (1) of Act 60 of 2008, a provision which was to have come into operation on 1 April 2013. This section was subsequently amended by s. 17 (1) of Act 7 of 2010 and repealed by s. 15 (1) of Act 22 of 2012 – date of commencement of this repeal deemed to have been 21 October 2008.]
9F . . .
[S. 9F inserted by s. 12 of Act 59 of 2000, amended by s. 24 (1) of Act 60 of 2001, by s. 16 of Act 74 of 2002 and by s. 7 (1) of Act 16 of 2004 and repealed by s. 24 (1) of Act 45 of 2003.]
SAIT CompendIum oF TAx LegISLATIon VoLume 1
87
INCOME TAX ACT – SECTIONS