Page 99 - SAIT Compendium 2016 Volume1

s 9I INCOME TAX ACT 58 OF 1962 s 10
be had to any period during that year before which the
company so commenced the carrying on of trade;
[Words preceding the proviso substituted by s. 22 of Act 31 of 2013 – date of commencement: 12 December 2013.]
[Para. (a) substituted by s. 18 (1) of Act 22 of 2012 – date of commencement: 1 January 2013; the substitution applies in respect of years of assessment commencing on or after that date.]
(b) at the end of that year of assessment and of all previous years of assessment of that company, 80 per cent or more of the cost of the total assets of the company was attributable to one or more of the following:
(i) any interest in equity shares in; (ii) any debt owed by; or
(iii) any intellectual property as de ned in section 23I (1) that is licensed by that company to,
any foreign company in which that company (whether
alone or together with any other company forming part of the same group of companies as that company) held at least 10 per cent of the equity shares and voting rights: Provided that in determining—
(aa) the total assets of the company, there must not be taken into account any amount in cash or in the form of a bank deposit payable on demand; and
(bb) whether a company complies with the requirements prescribed by this paragraph in relation to any year of assessment of that company, no regard must be had to any such year of assessment if the company did not at any time during such year of assessment own assets with a total market value exceeding R50 000; and
[Para. (b) substituted by s. 18 (1) of Act 22 of 2012 – date of commencement: 1 January 2013; the substitution applies in respect of years of assessment commencing on or after that date.]
(c) where the gross income of that company for that year of assessment exceeds R5 million, 50 per cent or more of that gross income consisted of amounts in the form of one or both of the following:
(i) any rental, dividend, interest, royalty or service fee paid or payable by any foreign company contemplated in paragraph (b); or
(ii) any proceeds from the disposal of any interest contemplated in paragraph (b) (i) or of any intellectual property contemplated in paragraph (b) (iii):
Provided that in determining the gross income of the company, there must not be taken into account any exchange difference determined in terms of section 24I in respect of any exchange item as de ned in that section to which that company is a party.
(3) An election made by a company in terms of subsection (1) is effective from the commencement of the year of assessment in respect of which that election is made.
(4) A headquarter company must submit to the Minister an annual report providing the Minister with the information that the Minister may prescribe within such time and containing such information as the Minister may prescribe.
[S. 9I inserted by s. 27 (1) of 24 of 2011 – date of commencement deemed to have been 1 January 2011. This section applies in respect of years of assessment commencing on or after that date.]
10 Exemptions
(1) There shall be exempt from normal tax—
(a) the receipts and accruals of the government of the
Republic in the national, provincial or local sphere;
[Para. (a) substituted by s. 13 (1) (a) of Act 89 of 1969, amended by s. 10 (1) (a) of Act 121 of 1984 and by s. 36
(6) of Act 9 of 1989 and substituted by s. 10 (1) (a) of Act 141 of 1992, by s. 26 (1) (a) of Act 45 of 2003, by s. 10 (1) (a) of Act 20 of 2006 and by s. 18 (1) (a) of Act 7 of 2010.]
(b) . . .
[Para. (b) substituted by s. 26 (1) (a) of Act 45 of 2003 and
by s. 10 (1) (b) of Act 20 of 2006 and omitted by s. 18 (1) (a) of Act 7 of 2010.]
(bA) the receipts and accruals of—
(i) any sphere of government of any country other
than the Republic;
(ii) any institution or body established by a foreign
government to the extent that—
(aa) the institution or body has been appointed by
that government to perform its functions in terms of an of cial development assistance agreement that is binding in terms of section 231 (3) of the Constitution of the Republic of South Africa, 1996; and
(bb) the agreement provides that the receipts and accruals of that institution or body must be exempt; and
[Sub-para. (ii) substituted by s. 10 (1) (a) of Act 8 of 2007.] (iii) any multinational organisation providing foreign donor funding in terms of an of cial development assistance agreement that is binding in terms of section 231 (3) of the Constitution of the Republic of South Africa Act, 1996, to the
extent—
(aa)the receipts and accruals are derived
pursuant to the organisation supplying goods or rendering services in relation to projects that are approved by the Minister after consultation with the Minister of Foreign Affairs;
(bb) that agreement provides that those receipts and accruals of that organisation must be exempt; and
(cc) the Minister announces that those receipts and accruals are exempt by notice in the Gazette;
[Para. (bA) inserted by s. 10 (1) (c) of Act 20 of 2006.]
(c) (i) . . .
[Sub-para. (i) substituted by s. 8 (1) (a) of Act 96 of 1981,
by s. 10 (1) (b) of Act 121 of 1984 and by s. 6 (1) (a) of Act 96 of 1985 and deleted by s. 9 (1) (a) of Act 21 of 1994.]
(ii) any pension payable to any person or his surviving spouse by reason of such person having occupied the of ce of State President or Vice State President: Provided that the provisions of this subparagraph shall not apply to any amount payable to any person or his surviving spouse by reason of such person having occupied the of ce of President as elected in terms of section 77 of the Constitution;
[Sub-para. (ii) substituted by s. 8 (1) (a) of Act 96 of 1975, by s. 8 (1) (b) of Act 96 of 1981 and by s. 6 (1) (a) of Act 96 of 1985 and amended by s. 9 (1) (b) of Act 21 of 1994.]
(iii) the salary and emoluments payable to any person who holds of ce in the Republic as an of cial of any government, other than the Government of the Republic, provided such person is stationed in the Republic for that purpose and is not ordinarily resident in the Republic;
[Sub-para. (iii) substituted by s. 10 (1) (b) of Act 141 of 1992.] (iv) any salary and emoluments payable to any domestic or private servant of any person referred to in subparagraph (iii) in respect of domestic or private services rendered or to be
SAIT CompendIum oF TAx LegISLATIon VoLume 1
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INCOME TAX ACT – SECTIONS