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Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part I: Normal Tax

12H. Additional deductions in respect of learnership agreements

 

(1)        For the purposes of this section—

 

'associated institution', in relation to any single employer, means—

(a) where the employer is a company, any other company which is associated with the employer company by reason of the fact that both companies are managed or controlled directly or indirectly by substantially the same persons;
(b) where the employer is not a company, any company which is managed or controlled directly or indirectly by the employer or by any partnership of which the employer is a member; or
(c) any fund established solely or mainly for providing benefits for employees or former employees of the employer or for employees or former employees of the employer and any company which is in terms of paragraph (a) or (b) an associated institution in relation to  the employer, but excluding any fund established by a trade union or industrial council and any fund established for postgraduate research otherwise than out of moneys provided by the employer or by any associated institution in relation to the employer;

 

employer’ means—

where only one employer is party to a registered learnership agreement, that employer; or in the case where more than one employer is a party to a registered learnership agreement, the employer which is identified in that agreement as the lead employer;

 

learner’ means a learner as defined in section 1 of the Skills Development Act, 1998;

 

'registered learnership agreement' means a learnership agreement that is—

(a) registered in accordance with the Skills Development Act, 1998; and
(b) entered into between a learner and an employer before 1 April 2022.

[Paragraph (b) substituted by section 30(1)(a) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016) - effective 1 October 2016]

 

SETA’ means a sector education and training authority established in terms of section 9(1) of the Skills Development Act, 1998, and defined as such in section 1 of that Act;

 

Skills Development Act, 1998’ means the Skills Development Act, 1998 (Act No. 97 of 1998).

 

(2)        

(a) In addition to any deductions allowable in terms of this Act and subject to paragraph (b), where—
(i) during any year of assessment a learner who holds a qualification to which an NQF level from 1 up to and including 6 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer; and
(ii) that agreement was entered into pursuant to a trade carried on by that employer,

there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R40 000.

(b) Where a learner is a party to a registered learnership agreement as contemplated in paragraph (a) for a period of less than 12 full months during the year of assessment contemplated in paragraph (a), the amount that is allowed to be deducted in terms of that paragraph must be limited to an amount which bears to an amount of R40 000 the same ratio as the number of full months that the learner is a party to that agreement bears to 12.
(c) If a registered learnership agreement is registered as contemplated in paragraph (a) of the definition of ‘registered learnership agreement’ within a period of 12 months after the last day of the year of assessment contemplated in paragraph (a), the registered learnership agreement must be deemed to have been so registered on the date on which the registered learnership agreement was entered into as contemplated in paragraph (b) of that definition.

[Subsection (2) substituted by section 30(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(2A)

(a) In addition to any deductions allowable in terms of this Act and subject to paragraph (b), where—
(i) during any year of assessment a learner who holds a qualification to which an NQF level from 7 up to and including 10 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer; and
(ii) that agreement was entered into pursuant to a trade carried on by that employer,

there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R20 000.

(b) Where a learner is a party to a registered learnership agreement as contemplated in paragraph (a) for a period of less than 12 full months during the year of assessment contemplated in paragraph (a), the amount that is allowed to be deducted in terms of that paragraph must be limited to an amount which bears to an amount of R20 000 the same ratio as the number of full months that the learner is a party to that agreement bears to 12.
(c) If a registered learnership agreement is registered as contemplated in paragraph (a) of the definition of ‘registered learnership agreement’ within a period of 12 months after the last day of the year of assessment contemplated in paragraph (a), the registered learnership agreement must be deemed to have been so registered on the date on which the registered learnership agreement was entered into as contemplated in paragraph (b) of that definition.

[Subsection (2A) inserted by section 30(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(3)        In addition to any deductions allowable in terms of this Act, where—

(a) during any year of assessment a learner who holds a qualification to which an NQF level from 1 up to and including 6 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer for a period of less than 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,

there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R40 000.

[Subsection (3) substituted by section 30(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(3A) In addition to any deductions allowable in terms of this Act, where—
(a) during any year of assessment a learner who holds a qualification to which an NQF level from 7 up to and including 10 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), is a party to a registered learnership agreement with an employer for a period of less than 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,

there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R20 000.

[Subsection (3A) inserted by section 30(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(4) In addition to any deductions allowable in terms of this Act, where—
(a) during any year of assessment a learner who holds a qualification to which an NQF level from 1 up to and including 6 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), to a registered learnership agreement with an employer for a period that equals or exceeds 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,

there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R40 000 multiplied by the number of consecutive 12 month periods within the duration of that agreement.

[Subsection (4) substituted by section 30(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(4A) In addition to any deductions allowable in terms of this Act, where—
(a) during any year of assessment a learner is a party who holds a qualification to which an NQF level from 7 up to and including 10 has been allocated in accordance with Chapter 2 of the National Qualifications Framework Act, 2008 (Act No. 67 of 2008), to a registered learnership agreement with an employer for a period that equals or exceeds 24 full months;
(b) that agreement was entered into pursuant to a trade carried on by that employer; and
(c) that learner successfully completes that learnership during that year of assessment,

there must, in that year, be allowed to be deducted from the income derived by that employer from that trade an amount of R20 000 multiplied by the number of consecutive 12 month periods within the duration of that agreement.

[Subsection (4A) inserted by section 30(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(5) Where a learner contemplated in subsection (2), (3) or (4) is a person with a disability (as defined in section 6B(1)) at the time of entering into the learnership agreement, the amounts contemplated in subsection (2), (3) or (4) must be increased by an amount of R20 000.

[Subsection 5 amended by section 21 of Act No. 43 of 2014]

 

(5A) Where a learner contemplated in subsection (2A), (3A) or (4A) is a person with a disability (as defined in section 6B (1)) at the time of entering into the learnership agreement, the amounts contemplated in subsection (2A), (3A) or (4A) must be increased by an amount of R30 000.

[Subsection (5A) inserted by section 30(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016)]

 

(6) This section does not apply in respect of any registered learnership agreement where—
(a) the learner that is the party to that agreement previously failed to complete any other registered learnership agreement to which the employer or an associated institution in relation to that employer was a party; and
(b) the registered learnership agreement contains the same education and training component as that other registered leamership agreement.

 

(7) Any SETA with which a learnership agreement has been registered as contemplated in the Skills Development Act, 1998, must submit to the Minister any information relating to that learnership agreement required by the Minister in the form and manner and at the place and time that the Minister prescribes.

 

(8) In respect of each year of assessment during which an employer is eligible for any deduction contemplated in this section, the employer must submit to the SETA with which the learnership agreement is registered any information relating to that learnership agreement required by the SETA in the form and manner and at the place and time indicated by the SETA.