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Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part VIII : Dividends Tax

64EB. Deemed beneficial owners of dividends

 

 

(1)        For the purposes of this Part, where—

(a) a person that is contemplated in section 64F(1) acquires the right to a dividend by way of cession; and
(b) that dividend is either announced or declared before that acquisition, the person ceding that right is deemed to be the beneficial owner of that dividend: Provided that this subsection does not apply to any cession in respect of a share if the person to whom those rights are ceded holds all the rights attaching to the share after the cession.

 

2)        For the purposes of this Part, where—

(a)        a person that is—

(i) a company which is a resident;
(ii) the government of the Republic in the national, provincial or local sphere;

[Subparagraph (ii) amended by section 69(1)(a) of Act No. 43 of 2014]

(iii) a public benefit organisation approved by the Commissioner in terms of section 30(3);
(iv) a trust contemplated in section 37A;
(v) an institution, board or body contemplated in section 10(1)(cA);
(vi) a fund contemplated in section 10(1)(d)(i) or (ii);
(vii) a person contemplated in section 10(1)(t);
(viii) [Subparagraph (viii) deleted by section 74 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]
(ix) [Subparagraph (ix) deleted by section 74 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]
(x) a portfolio of a collective investment scheme in securities;
(xi) any person to the extent that the dividend constitutes income of that person;
(xii) [Subparagraph (xii) deleted by section 74 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]
(xiii) any fidelity or indemnity fund contemplated in section 10(1)(d)(iii); or

[Subparagraph (xiii) amended by section 69(1)(b) of Act No. 43 of 2014]

(xiv) a small business funding entity as contemplated in section 10(1)(cQ)

[Subparagraph (xiv) inserted by section 69(1)(b) of Act No. 43 of 2014]

borrows a share in a listed company from another person; and

(b)        a dividend is either announced or declared before that share is borrowed,

any amount paid by that person to that other person not exceeding that dividend in respect of that borrowed share is deemed to be a dividend paid by that person for the benefit of that other person.

[Paragraph (b) amended by section 69(1)(c) of Act No. 43 of 2014]

 

(3)        For the purposes of this Part, where—

(a) a person that is contemplated in section 64F(1) acquires a share in a listed company (or any right in respect of that share) from another person after a dividend is announced or declared in respect of that share; and
(b) that acquisition is part of a resale agreement between the person acquiring that share and that other person or to any other company forming part of the same group of companies as that other person,

that other person or other company is deemed to be the beneficial owner of that dividend.

 

(4) For the purposes of this section, ‘resale agreement’ means the acquisition of a share by any person subject to an agreement in terms of which that person undertakes to dispose of that share or any other share of the same kind and of the same or equivalent quality at a future date.