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Income Tax Act, 1962 (Act No. 58 of 1962)

Chapter III : General Provisions

Part I : Returns

72A. Return relating to controlled foreign company


(1) Every resident who on the last day of the foreign tax year of a controlled foreign company or immediately before a foreign company ceases to be a controlled foreign company directly or indirectly, together with any connected person in relation to that resident, holds at least 10 per cent of the participation rights in any controlled foreign company (otherwise than indirectly through a company which is a resident), must submit to the Commissioner a return.


(2) A resident must have available for submission to the Commissioner when so requested, a copy of the financial statements of the controlled foreign company for the relevant foreign tax year of that controlled foreign company.

[Section 72A(2) substituted by section 18(1) of the Tax Administration Laws Amendment Act, 2012 (Act No. 21 of 2012)]


(3) Where a person in respect of any year of assessment fails to comply with the provisions of—
(a) [Section 72A(3)(a) deleted by section 11(1)(d) of the Revenue Laws Second Amendment the Revenue Laws Second Amendment Act, 2005 (Act No. 32 of 2005)];
(b) subsection (2) and no reasonable grounds exist either for that failure which is outside the control of the person or for that person to believe that such person was not subject to that requirement—
(i) the proportional amount which must be included in the income of that person in terms of section 9D for that year shall be determined with reference only to the receipts and accruals of the controlled foreign company; and
(ii) the provisions of section 6quat shall not apply in respect of any tax proved to be payable to the government of any other country with respect to the proportional amount of the net income of that controlled foreign company which is included in the income of that person in terms of section 9D.