| (b) |
so much of the amount allowed to be deducted from income in terms of the Income Tax Act (whether in that year or a previous year of assessment) in respect of the use of assets, or expenditure incurred, directly in respect of mineral resources transferred on or after 1 May 2009 to win, recover and develop those mineral resources to the condition specified in Schedule 1, as is included in the income of the extractor during that year of assessment in terms of section 8(4) of that Act (disregarding the exception in respect of section 15(a) of that Act), but not including an amount that is received or accrued from the disposal of assets the cost of which has in whole or in part been included in capital expenditure taken into account as mentioned in the definition of "capital expenditure incurred" in section 36(11) of that Act, |
less any amount which in terms of that Act—
| (i) |
is deductible from the income of the extractor during that year of assessment in respect of assets used or expenditure incurred to win, recover and develop those refined mineral resources to the condition specified in Schedule 1 for those mineral resources; or |
| (ii) |
would have been deductible from the income of the extractor during any year of assessment in respect of assets used or expenditure incurred to win, recover and develop those refined mineral resources had those mineral resources been developed to the condition specified in Schedule 1 for those mineral resources. |
| (2) |
For purposes of the formula in section 4(2), "earnings before interest and taxes" in respect of a year of assessment means the aggregate of— |
| (a) |
the gross sales of the extractor during that year in respect of unrefined mineral resources; and |
| (b) |
so much of the amount allowed to be deducted from income in terms of the Income Tax Act (whether in that year or a previous year of assessment) in respect of the use of assets, or expenditure incurred, directly in respect of mineral resources transferred on or after 1 May 2009 to win, recover and develop those unrefined mineral resources, as is included in the income of the extractor during that year of assessment in terms of section 8(4) of that Act (disregarding the exception in respect of section 15(a) of that Act), but not including an amount that is received or accrued from the disposal of assets the cost of which has in whole or in part been included in capital expenditure taken into account as mentioned in the definition of "capital expenditure incurred" in section 36(11) of that Act, |
less any amount which in terms of that Act—
| (i) |
is deductible from the income of the extractor during that year of assessment in respect of assets used or expenditure incurred directly to win, recover and develop those unrefined mineral resources to the condition specified in Schedule 2 for those mineral resources; or |
| (ii) |
would have been deductible from the income of the extractor during any year of assessment in respect of assets used or expenditure incurred to win, recover and develop those unrefined mineral resources had those mineral resources been developed to the condition specified in Schedule 2 for those mineral resources. |
| (3) |
For purposes of subsections (1) and (2), "earnings before interest and taxes" is determined without regard to— |
| (a) |
any deduction in respect of a financial instrument as defined in section 1 of the Income Tax Act (other than an instrument that is an option contract, forward contract or other instrument the value of which is derived directly or indirectly with reference to mineral resources); |
| (b) |
any deduction allowed in terms of section Il(a) of the Income Tax Act in respect of the royalty; |
| (i) |
in the case of mineral resources refined to the condition specified in Schedule 1 for those mineral resources, any deduction for expenditure incurred in respect of transport, insurance and handling of those refined mineral resources after those mineral resources were refined to that condition or any amount received or accrued to effect the disposal of that mineral resource; or |
| (ii) |
in the case of mineral resources brought to the condition specified in Schedule 2 for those mineral resources, any deduction for expenditure incurred in respect of transport, insurance and handling of those unrefined mineral resources after those mineral resources were brought to that condition or any amount received or accrued to effect the disposal of that mineral resource; |
| (d) |
any balance of assessed loss mentioned in section 20( 1)(a) of the Income Tax Act, unless the balance of assessed loss arises in respect of capital expenditure taken into account for purposes of paragraph 5(1) of the Tenth Schedule of the Income Tax Act; |
| (e) |
any deduction allowed in terms of section 24I of the Income Tax Act other than a deduction in respect of the adjustment referred to in section 6(5); or |
| (f) |
any determination in respect of an impermissible tax avoidance arrangement contemplated in Part IIA of the Income Tax Act. |
| (g) |
[Subsection (3)(g) deleted by the Taxation Laws Amendment Act, 2013 (Act No. 31 of 2013)] |
| (a) |
For purposes of determining "earnings before interest and taxes" in the case of a composite of refined mineral resources and unrefined mineral resources, the refined and unrefined proportions of the composite mineral resource must be determined in accordance with a method of reasonable apportionment that is consistently applied. |
| (b) |
For purposes of determining "earnings before interest and taxes", if the value of the refined proportion of a composite mineral resource as determined in terms of subsection (1) does not exceed 10 per cent of the total value of that composite mineral resource, that composite mineral resource may be treated solely as an unrefined mineral resource, and if the value of the unrefined proportion of a composite mineral resource as so determined does not exceed 10 per cent of the total value of that composite mineral resource, that composite mineral resource may be treated solely as a refined mineral resource. |
| (5) |
For purposes of this section, if "earnings before interest and taxes" is a negative amount that amount is deemed to be nil. |
South African Council for Educators Act, 2000
