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Income Tax Act, 1962 (Act 58 of 1962)

Chapter III: General Provisions

Part IIB: Reportable Arrangements

80M. Reportable Arrangements (Repealed)

 

 

[Repealed by the Tax Administration Act, 2011 (Act No. 28 of 2011)].

 

1) An arrangement is a reportable arrangement if it is listed in subsection (2) or if any tax benefit is or will be derived or is assumed to be derived by any participant by virtue of that arrangement and the arrangement—
a) contains provisions in terms of which the calculation of ‘interest’ as defined in section 24J, finance costs, fees or any other charges is wholly or partly dependent on the assumptions relating to the tax treatment of that arrangement (otherwise than by reason of any change in the provisions of this Act or any other law administered by the Commissioner);
b) has any of the characteristics or characteristics which are substantially similar to those contemplated in section 80C(2)(b);
c) is or will be disclosed by any participant as giving rise to a financial liability for purposes of Generally Accepted Accounting Practice but not for purposes of this Act;
d) does not result in a reasonable expectation of a pre-tax profit for any participant; or
e) results in a reasonable expectation of a pre-tax profit for any participant that is less than the value of that tax benefit to that participant if both are discounted to a present value at the end of the first year of assessment when that tax benefit is or will be derived or is assumed to be derived on a consistent basis and using a reasonable discount rate for that participant.

 

2) The following arrangements are reportable arrangements:
a) Any arrangement which would have qualified as a ‘hybrid equity instrument’ as defined in section 8E, if the prescribed period had been 10 years;
b) any arrangement which would have qualified as a ‘hybrid debt instrument’ as defined in section 8F, if the prescribed period in that section had been 10 years, but does not include any instrument listed on an exchange regulated in terms of the Securities Services Act, 2004 (Act No. 36 of 2004); or
c) any arrangement identified by the Minister by notice in the Gazette as an arrangement which is likely to result in any undue tax benefit.

 

3) This section does not apply to any excluded arrangement contemplated in section 80N.