Acts Online
GT Shield

Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part I: Normal Tax

9D. Net income of controlled foreign companies

 

(1)        For the purposes of this section—

 

‘business establishment’

[Definition deleted by Revenue Laws Amendment Act No. 20 of 2006];

 

"controlled foreign company"

means any foreign company where more than 50 per cent of the total participation rights in that foreign company are directly or indirectly held, or more than 50 per cent of the voting rights in that foreign company are directly or indirectly exercisable, by one or more persons that are residents other than persons that are headquarter companies: Provided that

(a) no regard must be had to any voting rights in any foreign company—
(i) which is a listed company; or
(ii) if the voting rights in that foreign company are exercisable indirectly through a listed company;
(b) any voting rights in a foreign company which can be exercised directly by any other controlled foreign company in which that resident (together with any connected person in relation to that resident) can directly or indirectly exercise more than 50 per cent of the voting rights are deemed for purposes of this definition to be exercisable directly by that resident; and
(c) a person is deemed not to be a resident for purposes of determining whether residents directly or indirectly hold more than 50 per cent of the participation rights or voting rights in a foreign company, if—
(i) in the case of a listed company or a foreign company the participation rights of which are held by that person indirectly through a listed company, that person holds less than five per cent of the participation rights of that listed company or
(ii) in the case of a scheme or arrangement contemplated in paragraph (e)(ii) of the definition of ‘company’ in section 1 or a foreign company the participation rights of which are held and the voting rights of which may be exercised by that person indirectly through such a scheme or arrangement, that person—
(aa) holds less than five per cent of the participation rights of that scheme or arrangement; and
(bb) may not exercise at least five per cent of the voting rights in that scheme or arrangement,

unless more than 50 per cent of the participation rights or voting rights of that foreign company or other foreign company are held by persons who are connected persons in relation to each other;

 

‘country of residence’,

in relation to a foreign company, means the country where that company has its place of effective management;

 

‘foreign business establishment’, in relation to a controlled foreign company, means—

(a) a fixed place of business located in a country other than the Republic that is used or will continue to be used for the carrying on of the business of that controlled foreign company for a period of not less than one year, where—
(i) that business is conducted through one or more offices, shops, factories, warehouses or other structures;
(ii) that fixed place of business is suitably staffed with on-site managerial and operational employees of that controlled foreign company who conduct the primary operations of that business;
(iii) that fixed place of business is suitably equipped for conducting the primary operations of that business;
(iv) that fixed place of business has suitable facilities for conducting the primary operations of that business; and
(v) that fixed place of business is located outside the Republic solely or mainly for a purpose other than the postponement or reduction of any tax imposed by any sphere of government in the Republic:

Provided that for the purposes of determining whether there is a fixed place of business as contemplated in this definition, a controlled foreign company may take into account the utilisation of structures as contemplated in subparagraph (i), employees as contemplated in subparagraph (ii), equipment as contemplated in subparagraph (iii), and facilities as contemplated in subparagraph (iv) of any other company—

(aa) if that other company is subject to tax in the country in which the fixed place of business of the controlled foreign company is located by virtue of residence, place of effective management or other criteria of a similar nature;
(bb) if that other company forms part of the same group of companies as the controlled foreign company; and
(cc) to the extent that the structures, employees, equipment and facilities are located in the same country as the fixed place of business of the controlled foreign company;
(b) any place outside the Republic where prospecting or exploration operations for natural resources are carried on, or any place outside the Republic where mining or production operations of natural resources are carried on, where that controlled foreign company carries on those prospecting, exploration, mining or production operations;
(c) a site outside the Republic for the construction or installation of buildings, bridges, roads, pipelines, heavy machinery or other projects of a comparable magnitude which lasts for a period of not less than six months, where that controlled foreign company carries on those construction or installation activities;
(d) agricultural land in any country other than the Republic used for bona fide farming activities directly carried on by that controlled foreign company;
(e) a vessel, vehicle, rolling stock or aircraft used for the purposes of transportation or fishing, or prospecting or exploration for natural resources, or mining or production of natural resources, where that vessel, vehicle, rolling stock or aircraft is used solely outside the Republic for such purposes and is operated directly by that controlled foreign company or by any other company that has the same country of residence as that controlled foreign company and that forms part of the same group of companies as that controlled foreign company;
(f) a South African ship as defined in section 12Q engaged in international shipping as defined in that section; or
(g) a ship engaged in international traffic used mainly outside the Republic;

 

'foreign company'

means any—

(a) cell or segregated account contemplated in the definition of "protected cell company";
(b) protected cell company to the extent that—
(i) specified assets of that company are not segregated into structurally independent cells or segregated accounts as contemplated in paragraph (a) of the definition of "protected cell company"; or
(ii) specified assets and liabilities of that company are not linked or attributed to cells or segregated accounts as contemplated in paragraph (b) of the definition of "protected cell company"; or
(c) foreign company, as defined in section 1, other than a protected cell company;

 

‘foreign financial instrument holding company’

[Definition deleted by section 12(1)(a) of Act No. 43 of 2014];

 

‘foreign tax year’

[Deleted by the Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012)]

 

'participation rights', in relation to a company, means—

(a) the right to participate in all or part of the benefits of the rights (other than voting rights) attaching to a share, or any interest of a similar nature, in that company; or
(b) paragraph (a) or no such rights can be determined for any person, the right to exercise any voting rights in that company; and

 

'protected cell company' means any entity incorporated, established or formed, whether by way of conversion or otherwise, in terms of any law of any country other than the Republic—

(a) if the principal trading activities of that entity constitute the business of an insurer; and
(b) where that law makes provision for—
(i) the segregation of specified assets of that entity into structurally independent cells or segregated accounts;
(ii) the linking or attribution of specified assets and liabilities to those cells or segregated accounts; or
(iii) separate patticipation rights in respect of each such cell or segregated account,

irrespective of whether or not that law provides that the establishment or formation of a cell or segregated account creates a legal person distinct from that entity.

 

(2) There shall be included in the income for the year of assessment of any resident (other than a resident that is a headquarter company) who directly or indirectly holds any participation rights in a controlled foreign company—
(a) on the last day of the foreign tax year of that controlled foreign company which ends during that year of assessment, an amount equal to—
(i) where that foreign company was a controlled foreign company for the entire foreign tax year, the proportional amount of the net income of that controlled foreign company determined for that foreign tax year, which bears to the total net income of that company during that foreign tax year, the same ratio as the percentage of the participation rights of that resident in relation to that company bears to the total participation rights in relation to that company on that last day; or
(ii) where that foreign company became a controlled foreign company at any stage during that foreign tax year, at the option of the resident, either —
(aa) an amount which bears to the proportional amount determined in accordance with subparagraph (i), the same ratio as the number of days during that foreign tax year that the foreign company was a controlled foreign company bears to the total number of days in that foreign tax year; or
(bb) the proportional amount determined in the manner contemplated in subparagraph (i) (as if the day that foreign company commenced to be a controlled foreign company was the first day of its foreign tax year), of the net income of that company for the period commencing on the day that the foreign company commenced to be a controlled foreign company and ending on the last day of that foreign tax year; or
(b) immediately before that foreign company ceased to be a controlled foreign company at any stage during that year of assessment before the last day of the foreign tax year of that controlled foreign company, an amount which shall be equal to, at the option of the resident, either—
(i) an amount determined in accordance with paragraph (a)(ii)(aa); or
(ii) the proportional amount determined in the manner contemplated in paragraph (a)(i) (as if the day that foreign company ceased to be a controlled foreign company was the last day of its foreign tax year), of the net income of that company determined for the period commencing on the first day of that foreign tax year and ending on the day before the company so ceased to be a controlled foreign company:

Provided that this subsection shall not apply –

(A) where that resident (together with any connected person in relation to that resident)—
(i) at the end of the last day of the foreign tax year of the controlled foreign company; or
(ii) in the case where that foreign company ceased to be a controlled foreign company during the relevant foreign tax year, immediately before that foreign company so ceased to be a controlled foreign company,

in aggregate holds less than 10 per cent of the participation rights and may not exercise at least 10 per cent of the voting rights in that controlled foreign company; or

(B) to the extent that the participation rights are held by that resident indirectly through any company (other than a company that is a headquarter company) which is a resident; or
(C) to the extent that—
(i) the participation rights are held by an insurer as defined in section 29A in any policyholder fund as defined in terms of that section, and are directly attributable to—
(aa) a linked policy as defined in section 1 of the Long-term Insurance Act; or
(bb) a policy as defined in section 29A, other than a policy contemplated in item (aa), of which the amount of the policy benefits as defined in the Long-term Insurance Act, is not guaranteed by the insurer and is to be determined wholly by reference to the value of particular assets or categories of assets;
(ii) the holding of the participation rights by the insurer does not form part of any transaction, operation or scheme entered into or effected solely or mainly for purposes of utilising the provisions of this paragraph in order to avoid the inclusion of an amount in the income of a resident as contemplated in this subsection:
(D) to the extent that the participation rights are held by a portfolio of a collective investment scheme in securities or a portfolio of a collective investment scheme in participation bonds that is a resident directly or indirectly in a scheme or arrangement contemplated in paragraph (e)(ii) of the definition of 'company' in section 1.

[Subsection 2(D) inserted by section 20(1)(a) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016) - commenced 1 March 2017]

 

(2A) For the purposes of this section, the ‘net income’ of a controlled foreign company in respect of a foreign tax year is an amount equal to the taxable income of that company determined in accordance with the provisions of this Act as if that controlled foreign company had been a taxpayer, and as if that company had been a resident for purposes of the definition of ‘gross income’, sections 7(8), 10(1)(h), 25B, and paragraphs 2(1)(a), 24, 70, 71, 72 and 80 of the Eighth Schedule: Provided that
(a) any deductions or allowances which may be allowed, or any amounts which may be set off against, the income of that foreign company in terms of this Act shall be limited to the amount of that income;
(b) any amount whereby such deductions or allowances or amounts exceed the amount of such income, shall be carried forward to the immediately succeeding foreign tax year and be deemed to be a balance of assessed loss which may be set off against the income of such company in such succeeding year for the purposes of section 20;
(c) no deduction shall be allowed in respect of any—
(i) interest, royalties, rental, insurance premium or income of a similar nature which is paid or payable or deemed to be paid or payable by that company to any other controlled foreign company (including any similar amount adjusted in terms of section 31);
(ii) exchange difference determined in terms of section 24I in respect of any exchange item to which that company and any other controlled foreign company are parties;
(iii) exchange difference in respect of any forward exchange contract or foreign currency option contract entered into to hedge the exchange item referred to in subparagraph (ii); or
(iv) reduction or discharge by that company of a debt owed to that company by any other controlled foreign company for no consideration or for consideration less than the amount by which the face value of the debt has been so reduced or discharged,

where that controlled foreign company and that other controlled foreign company form part of the same group of companies, unless that interest, rental, royalty, insurance premium, other income, adjusted amount, exchange difference, reduction or discharge is taken into account to determine the net income of that other controlled foreign company;

(d) [Subsection (2A)(d) deleted by section 13 of the Revenue Laws Amendment Act, 74 of 2002];
(e) where a foreign company becomes a controlled foreign company after 1 October 2001, the valuation date for purposes of the determination of any taxable capital gain or assessed capital loss in terms of the Eighth Schedule, shall be the day before such company becomes a controlled foreign company;
(f) where the resident contemplated in subsection (2) is a natural person, special trust or an insurer in respect of its individual policyholder fund, the taxable capital gain of the controlled foreign company shall, for the purposes of paragraph 10 of the Eighth Schedule, be 40 per cent of that company's net capital gain for the relevant foreign tax year;

[Subsection (2A)(f) deleted by section 7(1) of the Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2016 (Act No. 13 of 2016) - effective 1 March 2016]

(g) [deleted by section 13 of the Revenue Laws Amendment Act, 74 of 2002];
(h) [deleted by Revenue Laws Amendment Act No. 31 of 2005];
(i) [deleted by Act No. 24 of 2011 of the Taxation Laws Amendment Act, 2011];
(j) [deleted by Revenue Laws Amendment Act No. 31 of 2005];
(k) for the purposes of paragraph 43 of the Eighth Schedule, ‘local currency’ of a controlled foreign company otherwise than in relation to a permanent establishment of that controlled foreign company, means the functional currency of that company;
(l) where the functional currency of a controlled foreign company—

(i)        was the currency of a country which—

(aa) abandoned its currency; and
(bb) had an official rate of inflation of 100 per cent or more for the foreign tax year preceding the abandonment of the currency; and
(ii) the controlled foreign company adopted a new functional currency as a consequence of the abandonment contemplated in subparagraph (i)(aa),

the controlled foreign company must, for the purposes of determining the cost of an asset of the controlled foreign company, be deemed to have acquired the asset in the new currency contemplated in subparagraph (ii)—

(A) on the first day of the foreign tax year of the controlled foreign company in which; and
(B) for an amount equal to the market value of the asset on the date on which,

the new currency was adopted by the controlled foreign company;

Provided further that

(i) the net income of a controlled foreign company in respect of a foreign tax year shall be deemed to be nil where—
(aa) the aggregate amount of taxes on income payable to all spheres of government of any country other than the Republic by the controlled foreign company in respect of the foreign tax year of that controlled foreign company is at least 75 per cent of the amount of normal tax that would have been payable in respect of any taxable income of the controlled foreign company had the controlled foreign company been a resident for that foreign tax year; or
(bb) all the receipts and accruals of that controlled foreign company are—
(i) attributable to any foreign business establishment of that controlled foreign company as contemplated in subsection (9)(b); and
(ii) not required to be taken into account in terms of subsection (9A);

[Proviso paragraph (i) amended by section 12(1)(b) of Act No. 43 of 2014]

(ii) the aggregate amount of tax payable by a controlled foreign company in respect of a foreign tax year of that controlled foreign company as contemplated in sub paragraph (i) must be determined—
(aa) after taking into account any applicable agreement for the prevention of double taxation and any credit, rebate or other right of recovery of tax from any sphere of government of any country other than the Republic;
(bb) after disregarding any loss in respect of a year other than that foreign tax year or from a company other than that controlled foreign company; and

[Subsection (2A)(ii)(bb)(further proviso) substituted by section 20(1)(b) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016 - commenced 1 March 2017

(cc) before taking into account any amount which would, had that controlled foreign company been a resident for that foreign tax year, have been included in the income of that controlled foreign company in terms of subsection (2) for that foreign tax year.

 

(3) [deleted by section 10 of Act 59 of 2000];

 

(4) [deleted by section 10 of Act 59 of 2000];

 

(4A) [deleted by section 10 of Act 59 of 2000];

 

(5) [deleted by section 10 of Act 59 of 2000];

 

(6) The net income of a controlled foreign company in respect of a foreign tax year shall be determined in the functional currency of that controlled foreign company and shall, for purposes of determining the amount to be included in the income of any resident during any year of assessment under the provisions of this section, be translated to the currency of the Republic by applying the average exchange rate for that foreign tax year: Provided that any exchange item denominated in any currency other than the functional currency of that controlled foreign company shall be deemed not to be attributable to any permanent establishment of the controlled foreign company if the functional currency is the currency of a country which has an official rate of inflation of 100 per cent or more for that foreign tax year

 

(7) [deleted by section 10 of Act 59 of 2000];

 

(8) [deleted by section 10 of Act 59 of 2000];

 

(9) Subject to subsection 9A, in determining the net income of a controlled foreign company in terms of subsection (2A), there must not be taken into account any amount which—
(a) [deleted by the Revenue Laws Amendment Act of 2003];
(b) is attributable to any foreign business establishment of that controlled foreign company (whether or not as a result of the disposal or deemed disposal of any assets forming part of that foreign business establishment) and, in determining that amount and whether that amount is attributable to a foreign business establishment—
(i) that foreign business establishment must be treated as if that foreign business establishment were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the controlled foreign company of which the foreign business establishment is a foreign business establishment; and
(ii) that determination must be made as if the amount arose in the context of a transaction, operation, scheme, agreement or understanding that was entered into on the terms and conditions that would have existed had the parties to that transaction, operation, scheme, agreement or understanding been independent persons dealing at arm's length;
(c) is attributable to any policyholder that is not a resident or a controlled foreign company in relation to a resident in respect of any policy issued by a company licensed to issue any long-term policy as defined in the Long-term Insurance Act, in its country of residence;
(d) is subject to—
(i) the withholding tax on interest in terms of Part IVB;

[Subparagraph (i) amended by section 19(1)(h) of the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013)]

(ii) the withholding tax on royalties in terms of Part IVA, after taking into account any applicable agreement for the prevention of double taxation;
(iii) [Subsection (9)(d)(iii) deleted by section 20(1)(c) of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016) - commenced 1 January 2017]
(e) is included in the taxable income of the company;
(f) is attributable to any foreign dividend declared to that controlled foreign company, by any other controlled foreign company in relation to the resident, to the extent that the foreign dividend does not exceed the aggregate of all amounts which have been or will be included in the income of the resident in terms of this section in any year of assessment, which relate to the net income of—
(i) the company declaring the dividend; or
(ii) any other company which has been included in the income of that resident by virtue of that resident’s participation rights in that other company held indirectly through the company declaring the dividend,

reduced by—

(aa) the amount of any foreign tax payable, in respect of the amounts so included in that resident’s income; and
(bb) so much of all foreign dividends received by or accrued to that controlled foreign company as was—
(A) excluded from the application of this section in terms of this paragraph or section 10B(2)(a),(b) or (c);
(B) previously not included in the income of that resident by virtue of any prior inclusion in terms of section 9D.

(fA)        is attributable to—

(i) any interest, royalties, rental, insurance premium or income of a similar nature which is paid or payable or deemed to be paid or payable to that company by any other controlled foreign company (including any similar amount adjusted in terms of section 31);
(ii) any exchange difference determined in terms of section 24I in respect of any exchange item to which that company and any other controlled foreign company are parties;
(iii) any exchange difference in respect of any forward exchange contract or foreign currency option contract entered into to hedge the exchange item referred to in subparagraph (ii); or
(iv) the reduction or discharge by any other controlled foreign company of a debt owed by that company to that other controlled foreign company for no consideration or for consideration less than the amount by which the face value of the debt has been so reduced or discharged,

where that controlled foreign company and that other controlled foreign company form part of the same group of companies; or

(fB) is attributable to the disposal of any asset, as defined in the Eighth Schedule, (other than any financial instrument or intangible asset as defined in paragraph 16 of the Eighth Schedule), where that asset was attributable to any foreign business establishment of any other controlled foreign company where that company and that other controlled foreign company form part of the same group of companies;
(g) [deleted by section 10 of Act 59 of 2000];
(h) [deleted by the Revenue Laws Amendment Act of 2003].

 

(9A)        

(a) Any amount which is attributable to a foreign business establishment of a controlled foreign company as contemplated in subsection (9)(b) must, notwithstanding that subsection, be taken into account in determining the net income of that controlled foreign company if that amount—
(i) is derived from the sale of goods by that controlled foreign company to any connected person (in relation to that controlled foreign company) who is a resident, unless—
(aa) that controlled foreign company purchased those goods within the country of residence of that controlled foreign company from any person who is not a connected person in relation to that controlled foreign company;
(bb) the creation, extraction, production, assembly, repair or improvement of goods undertaken by that controlled foreign company amount to more than minor assembly or adjustment, packaging, repackaging and labelling;
(cc) that controlled foreign company sells a significant quantity of goods of the same or a similar nature to persons who are not connected persons in relation to that controlled foreign company, at comparable prices (after accounting for the level of the market, volume discounts and costs of delivery); or
(dd) that controlled foreign company purchases the same or similar goods mainly within the country of residence of that controlled foreign company from persons who are not connected persons in relation to that controlled foreign company;
(iA) is derived from the sale of goods by that controlled foreign company to a person, other than a connected person (in relation to that controlled foreign company) who is a resident, where that controlled foreign company initially purchased those goods or any tangible intermediary inputs thereof from one or more connected persons (in relation to that controlled foreign company) who are residents, unless—
(aa) those goods or tangible intermediary inputs thereof purchased from connected persons (in relation to such controlled foreign company) who are residents amount to an insignificant portion of the total goods or tangible intermediary inputs of those goods;
(bb) the creation, extraction, production, assembly, repair or improvement of goods undertaken by that controlled foreign company amount to more than minor assembly or adjustment, packaging, repackaging and labelling;
(cc) the products are sold by that controlled foreign company to a person who is not a connected person in relation to that controlled foreign company, for physical delivery to a customer’s premises situated within the country of residence of that controlled foreign company; or
(dd) products of the same or similar nature are sold by that controlled foreign company mainly to persons who are not connected persons in relation to that controlled foreign company for physical delivery to customers’ premises situated within the country of residence of that controlled foreign company;
(ii) is derived from any service performed by that controlled foreign company to a connected person (in relation to that controlled foreign company) who is a resident, unless that service is performed outside the Republic and—
(aa) the service relates directly to the creation, extraction, production, assembly, repair or improvement of goods utilised within one or more countries other than the Republic;
(bb) the service relates directly to the sale or marketing of goods of a connected person (in relation to that controlled foreign company) who is a resident and those goods are sold to persons who are not connected persons in relation to that controlled foreign company for physical delivery to customers’ premises situated within the country of residence of that controlled foreign company;
(cc) the service is rendered mainly in the country of residence of that controlled foreign company for the benefit of customers that have premises situated in that country; or
(dd) to the extent that no deduction is allowed of any amount paid by that connected person to that controlled foreign company in respect of the service;
(iii) arises in respect of a financial instrument—
(aa) unless that financial instrument is attributable to the principal trading activities of the foreign business establishment and those principal trading activities—
(A) constitute the activities of a bank, financial service provider or insurer; and
(B) do not constitute the activities of a treasury operation or captive insurer;

(bb)        unless—

(A) that amount is attributable to any exchange difference determined in terms of section 24I in respect of that financial instrument;
(B) the exchange difference contemplated in subitem (A) arises in the ordinary course of business of the principal trading activities of that foreign business establishment; and
(C) the principal trading activities contemplated in subitem (B) do not constitute the activities of a treasury operation or captive insurer; or
(cc) to the extent that the total of—
(A) those amounts arising in respect of financial instruments attributable to activities of that foreign business establishment; and
(B) amounts arising from exchange gains determined in terms of section 24I attributable to activities of that foreign business establishment,

other than amounts in respect of which paragraphs (c) to (fB) of subsection (9) apply or amounts derived from the activities of a treasury operation or a captive insurer, exceeds five per cent of the total of all amounts received by or accrued to the controlled foreign company that are attributable to that foreign business establishment, other than amounts in respect of which paragraphs (c) to (fB) of subsection (9) apply or amounts derived from the activities of a treasury operation or a captive insurer;

(iv) arises by way of rental in respect of any movable property, unless that movable property is leased by the controlled foreign company in terms of—
(aa) an operating lease or; and
(bb) a lease that constitutes a financial instrument;
(v) arises in respect of the use or right of use of or permission to use any intellectual property as defined in section 23I,unless—
(aa) that controlled foreign company directly and regularly creates, develops or substantially upgrades any intellectual property as defined in section 23I which gives rise to that amount; and
(bb) that intellectual property does not constitute property which constitutes tainted intellectual property as defined in section 23I;
(vi) is a capital gain determined in respect of the disposal or deemed disposal of any intellectual property as defined in section 23I. unless that controlled foreign company directly and regularly creates, develops or substantially upgrades any intellectual property as defined in section 23I which gives rise to that amount; or
(vii) is in the form of an insurance premium, unless that amount is attributable to the principal trading activities of the foreign business establishment and those principal trading activities—
(aa) constitute the activities of an insurer; and
(bb) do not consititute the activities of a captive insurer:

Provided that if any amount which is attributable to a foreign business establishment of a controlled foreign company as contemplated in subsection (9)(b) is, solely as a result of the application of subparagraph (iii) of this paragraph, not taken into account in determining the net income of that controlled foreign company, that amount must be so taken into account—

(A) to the extent that a deduction is allowed in respect of any other amount incurred by a connected person (in relation to that controlled foreign company) who is a resident; and
(B) where that amount is attributable to that other amount.

[Paragraph (a) amended by section 13(1)(b) and (c) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

(b)        For the purposes of—

(i) [Subparagraph (i) deleted by section 13(1)(d) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]
(ii) [Subparagraph (i) deleted by section 13(1)(d) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]
(iii) items (aa) and (bb) of paragraph (a)(iii), where the principal trading activities of a foreign business establishment do not constitute the activities of a treasury operation, the principal trading activities of that foreign business establishment must be deemed to constitute the activities of a treasury operation where—
(aa) less of those principal trading activities are conducted in the country in which the foreign business establishment is located than in any other single country;
(bb) those principal trading activities do not involve the regular and continuous acceptance of deposits from or the provision of credit to clients who are not connected persons in relation to that controlled foreign company; or
(cc) less than 50 per cent of the amounts attributable to the activities of the foreign business establishment are derived from those principal trading activities with respect to clients who are not connected persons in relation to that controlled foreign company;
(iv) items (aa) and (bb) of paragraph (a)(iii) and paragraph (a)(vii), where the principal trading activities of a foreign business establishment do not constitute the activities of a captive insurer, the principal trading activities of that foreign business establishment must be deemed to constitute the activities of a captive insurer where—
(aa) less of those principal trading activities are conducted in the country in which that foreign business establishment is located than in any other single country;
(bb) those principal trading activities do not involve the regular transaction of business as an insurer with clients who are not connected persons in relation to that controlled foreign company; or
(cc) less than 50 per cent of the amounts attributable to activities of that foreign business establishment are derived from those principal trading activities with respect to clients who are not connected persons in relation to that controlled foreign company; and
(v) paragraph (a)(iv), ‘operating lease’ means a lease of movable property concluded by a lessor in the ordinary course of business of letting such property if—
(aa) such property may be hired by members of the general public directly from that lessor in terms of such a lease, for a period of no more than five years;
(bb) either—
(A) the cost of maintaining such property and of carrying out repairs thereto required in consequence of normal wear and tear is ultimately borne by the lessor; or
(B) the activities of maintaining and repairing such property that are required in consequence of normal wear and tear are performed by the lessor; and
(cc) subject to any claim that the lessor may have against the lessee by reason of the lessee's failure to take proper care of the property, the risk of destruction or loss of or other disadvantage to such property is not assumed by the lessee.

 

(10) [deleted by Act No. 24 of 2011 of the Taxation Laws Act];

 

(11) [deleted by the Revenue Laws Amendment Act of 2003];

 

(12) [deleted by Act No. 24 of 2011 of the Taxation Laws Amendment Act];

 

(13) [deleted by Act No. 24 of 2011 of the Taxation Laws Amendment Act];

 

(14) [deleted by Act No. 24 of 2011 of the Taxation Laws Amendment Act].