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Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part I: Normal Tax

12K. Exemption of certified emission reductions


(1)        For the purposes of this section—


certified emission reduction’ means a certified emission reduction as defined in paragraph 1(b) of the Modalities;


Clean Development Mechanism project’ means a CDM Project as defined in regulation 1 of the Regulations;


‘Designated National Authority’ means the DNA as defined in regulation 1 of the Regulations and designated in regulation 2 of the Regulations;


Kyoto Protocol’ means the Protocol to the United Nations Framework Convention on Climate Change adopted at the third session of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto, Japan, on 11 December 1997;


Modalities’ means the Modalities and procedures for a clean development mechanism as contained in the Annex to Decision 3/CMP.1 in Part Two of the Addendum to the Report of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol on its first session, held at Montreal from 28 November to 10 December 2005 (FCCC/KP/CMP/2005/8 Add.1);


qualifying CDM project’ means a Clean Development Mechanism project—

(a) in respect of which a letter of approval as contemplated in regulations 3(1)(a) and 7(3) of the Regulations has been issued by the Designated National Authority; and
(b) that has been registered as contemplated in paragraph 36 of the Modalities on or before 31 December 2020;


Regulations’ means the Regulations for the Establishment of a Designated National Authority for the Clean Development Mechanism, 2005 (Government Notice No. R.721 published in Government Gazette No. 27788 of 22 July 2005), made by the Minister responsible for environmental affairs in terms of section 25(3) of the National Environmental Management Act, 1998 (Act No. 107 of 1998).


(2) There must be exempt from normal tax any amount received by or accrued to or in favour of any person in respect of the disposal by that person of any certified emission reduction derived by that person in the furtherance of a qualifying CDM project carried on by that person.