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Income Tax Act, 1962 (Act No. 58 of 1962)

Schedules

Seventh Schedule : Benefits or Advantages Derived by reason of Employment or the Holding of any Office

1. Definitions

 

(1) For the purposes of this Schedule, unless the context otherwise indicates—

 

"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; or
(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 employee's 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;

 

"consideration"

as respects any reference in this Schedule to any consideration given by an employee does not include any consideration in the form of services rendered or to be rendered by the employee;

 

"defined benefit component"

[Definition deleted by section 73(1) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014) - effective 1 March 2016]

 

"defined contribution component"

[Definition deleted by section 73(1) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014) - effective 1 March 2016]

 

"employee"

in relation to any employer, means a person who is an employee in relation to such employer for the purposes of the Fourth Schedule, excluding any person who prior to 1 March 1992 by reason of superannuation, ill-health or other infirmity retired from the employ of such employer, but including in relation to any company, any director of such company and any person who was previously employed by, or was a director of, such company if such person is or was the sole holder of shares in or one of the controlling holders of shares in such company and, for the purposes of paragraphs 2(h) and 13, including any person who has retired as aforesaid and who, after the employee’s retirement is released by the employee’s employer from an obligation which arose before the employee’s retirement to reimburse the employer for an amount paid by the employer on behalf of the employee or to pay any amount which became owing by the employee to the employer before the employee’s retirement;

[Definition substituted by section 117(1)(b) of the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013), GG 37158, dated 12 December 2013]

 

"employer"

means any person who is an employer as defined in paragraph 1 of the Fourth Schedule and includes—

(a) any company; and
(b) for the purpose of paragraph 2 and the determination of the cash equivalent of the value of any taxable benefit granted to any person who derives remuneration as defined in the said paragraph from employment in the public service or any administration or undertaking of the State or who holds office under the Republic, the State;

 

"employment"

means any office or employment;

 

"loan"

[Definition deleted by section 93(a) of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015)]

 

"month"

means any of the twelve portions into which any calendar year is divided;

 

"official rate of interest"

[Definition deleted by section 67 of the Taxation Laws Amendment Act, 2017 (Act No. 17 of 2017)]

 

"retirement-funding income"

[Definition deleted by section 73(1) of the Taxation Laws Amendment Act, 2014​ (Act No. 43 of 2014) - effective 1 March 2016]

 

"taxable benefit"

means a taxable benefit contemplated in paragraph 2, whether the grant of such benefit is voluntary or otherwise, but excluding"—

(a) any benefit the amount or value of which is exempt from normal tax under the provisions of section 10 of this Act;

[Paragraph (a) substituted by section 101(1)(a) of the Taxation Laws Amendment Act, 2011 (Act No. 24 of 2011)]

(b) any benefit provided by any benefit fund in respect of medical, dental and similar services. hospital services, nursing services and medicines;

[Paragraph (b) substituted by section 101(1)(a) of the the Taxation Laws Amendment Act, 2011 (Act No. 24 of 2011)]

(c) any lump sum benefit payable by a benefit fund, pension fund, pension preservation fund, provident fund or provident preservation fund being a benefit referred to in the definition of "benefit fund" in section 1 of this Act or in paragraph (i) of the proviso to paragraph (c) of the definition of "pension fund" in that section or in paragraph (a) of the definition of "provident fund" in that section;

[Paragraph (c) substituted by section 47 of the Taxation Laws Amendment Act, 2008 (Act No. 3 of 2008)]

(d) any benefit or privilege received by or accrued to a person contemplated in section 9(2)(g) or (h) stationed outside the Republic which is attributable to that person’s services rendered outside the Republic; or

[Paragraph (d) substituted by section 101(1)(b) of the the Taxation Laws Amendment Act, 2011 (Act No. 24 of 2011)]

(e) any severance benefit.

[Paragraph (e) inserted by section 101(1)(c) of the Taxation Laws Amendment Act, 2011 (Act No. 24 of 2011)- effective 1 March 2011]