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Income Tax Act, 1962 (Act 58 of 1962)

Tax Holiday Regulations

5. Ratio of Human Resource Remuneration to Value Added

 

 

1) The ratio of human resource remuneration to value added shall be determined in accordance with the following formula:

in which formula—

a) "V" is the percentage to be determined;
b) "A" is the gross operating surplus determined in accordance with Part A of Table 1; and
c) "B" is the total human resource remuneration determined in accordance with Part B of Table 1.

 

2) To qualify for purposes of the human resource component, such percentage shall exceed 55 per cent and be reflected in the application.

 

3) Where the project consists of more than one component, one of which is the human resource component-
a) such percentage shall be maintained for a period of two years during the tax holiday status attributable to the certification by the Board of the other component of the qualifying project of a qualifying company; or
b) such percentage shall be maintained for a period of four years during the tax holiday status attributable to the certification by the Board of the other two components of the qualifying project of a qualifying company.