Page 97 - SAIT Compendium 2016 Volume1

s 9H
INCOME TAX ACT 58 OF 1962 s 9H
(ii) reacquired each of those assets on the day on which that company so ceased to be a resident, became a headquarter company or ceased to be a controlled foreign company at an expenditure equal to the market value contemplated in subparagraph (i).
(c) Where a company that is a resident ceases to be a resident or becomes a headquarter company during any year of assessment of that company as contemplated in paragraph (a) (i)—
(i) that year of assessment must be deemed to have ended on the date immediately before the day on which that company so ceased to be a resident or became a headquarter company;
(ii) the next succeeding year of assessment of that company must be deemed to have commenced on the day on which that company so ceased to be a resident or became a headquarter company; and
(iii) that company must, on the date immediately before the day on which the company so ceased to be a resident or became a headquarter company and for the purposes of section 64EA (b), be deemed to have declared and paid a dividend that consists solely of a distribution of an asset in specie—
(aa) the amount of which must be deemed to be equal to the sum of the market values of all the shares in that company on that date less the sum of the contributed tax capital of all the classes of shares in the company as at that date; and
(bb) to the person or persons holding shares in that company in accordance with the effective interest of that person or those persons in the shares in the company as at that date.
(d) Where a controlled foreign company ceases to be a controlled foreign company during any foreign tax year of that controlled foreign company as contemplated in paragraph (a) (ii)—
(i) that foreign tax year must be deemed to have ended on the date immediately before the day on which that controlled foreign company so ceased to be a controlled foreign company; and
(ii) the next succeeding foreign tax year of that controlled foreign company must be deemed to have commenced on the day on which that controlled foreign company so ceased to be a controlled foreign company.
* Added paragraph applies iro—
(a) (i) any person that ceases to be a resident; or
(e) Where a company ceases to be a resident as contemplated in paragraph (a), the amount of any capital gain disregarded in terms of paragraph 64B of the Eighth Schedule that was determined in respect of a disposal of an equity share by that company within three years immediately preceding the date on which that company ceases to be a resident, must be deemed, in respect of the year of assessment of that company ending as contemplated in paragraph (c), to be an amount of net capital gain derived by that company from that capital gain.
[Para. (e) added by s. 14 (1) (c) of Taxation Laws Amendment Act, 2015 – date of commencement deemed to have been 5 June 2015*.]
(f) Where a company ceases to be a resident as contemplated in paragraph (a), the amount of any foreign dividend that was exempt from normal tax only in terms of section 10B (2) (a) within the three years immediately preceding the date on which that company ceases to be a resident, must be deemed to be a foreign dividend received by or accrued to that company in respect of the year of assessment of that company ending as contemplated in paragraph (c) that is not exempt in terms of section 10B (2).
[Para. (f) added by s. 14 (1) (c) of Taxation Laws Amendment Act, 2015 – date of commencement deemed to have been 5 June 2015*.]
(4) Subsections (2) and (3) do not apply in respect of an asset of a person where that asset constitutes—
(a) immovable property situated in the Republic that is
held by that person; (b) . . .
[Para. (b) deleted by s. 21 (1) of Act 31 of 2013.†]
(c) any asset which is, after the person ceases to be a resident or a controlled foreign company as contemplated in subsection (2) or (3), attributable to a permanent establishment of that person in the
Republic;
(d) any qualifying equity share contemplated in section
8B that was granted to that person less than ve years before the date on which that person ceases to be a resident as contemplated in subsection (2) or (3);
(e) any equity instrument contemplated in section 8C that had not yet vested as contemplated in that section at the time that the person ceases to be a resident as contemplated in subsection (2) or (3); or
(f) any right of that person to acquire any marketable security contemplated in section 8A.
(ii) any controlled foreign company that ceases to be a controlled foreign company in relation to a resident, on or after that date; and
(b) any person that becomes a headquarter company during years of assessment commencing on or after that date.
† Section 21 (2) of Act 31 of 2013 has been amended by s. 147 (1) of Taxation Laws Amendment Act, 2015 (‘in relation to that resident’ deleted retrospectively from para. (c) below wef 12 December 2013). Section 21 (1) comprises the deletion of para. (b) of s. 9H (4) and came into operation on 12 December 2013 and applies iro any person that— (a) ceases to be a resident;
(b) becomes a headquarter company; or
(c) ceases to be a controlled foreign company, on or after that date.
SAIT CompendIum oF TAx LegISLATIon VoLume 1 89
INCOME TAX ACT – SECTIONS