TAX G UI DE2011/2012

INDEXAdministrativePenalties 14 Bond/InstalmentRepayments 32 Broad-BasedEmployeeEquity 13 BudgetProposals 2 BursariesandScholarships 13 CapitalGainsTax 22 CapitalIncentiveAllowances 19 ConnectedPersons 35 Deductions-Donations 15 Deductions-Employees 9 Deductions-Individuals 10 DeemedCapital-DisposalofShares 35 DeemedEmployees 7 Directors-PAYE 30 DividendsTax 3 DonationsTax 36 DoubleTaxationAgreements andWithholdingTaxes 29 EnvironmentalExpenditure 39 EstateDuty 36 ExchangeControlRegulations 38 ExecutorsRemuneration 36 Exemptions-Individuals 9 FarmingIncome 31 FringeBenefits 16 IndustrialPolicyProjects 35 InterestRates-Changes 33 LearnershipAllowance 30 MarriedinCommunity ofProperty 39 NationalCreditAct 34 Non-Residents 28 OfficialInterestRates andPenalties 32 PassiveHoldingCompany 3 Patent/IntellectualProperty 25 Pre-paidExpenditure 25 Pre-ProductionInterest 13 Pre-TradingExpenditure 13 PrimeOverdraftRates ProvisionalTax PublicBenefitOrganisations RecreationalClubs RegionalHeadquarterCompany ReinvestmentRelief RelocationofanEmployee ResearchandDevelopment ResidenceBasedTaxation ResidentialBuildingAllowances RestraintofTrade RetentionofDocuments andRecords RetirementLumpSumBenefits Ring-FencedAssessedLosses RoyaltiestoNon-Residents SecuritiesTransferTax SkillsDevelopmentLevy SmallBusinessCorporations StampDuty StrategicAllowances TaxImpact-Companies TaxRates-Companies TaxRates-Individuals TaxRates-Trusts TaxRebates TaxThresholds TransferDuty TravelAllowances Trusts-Losses TurnoverTax-MicroBusiness Value-AddedTax Value-ExtractionTax VentureCapitalInvestments VoluntaryDisclosureProgramme WearandTearAllowances WithdrawalLumpSumBenefits WithholdingTaxonInterest 33 12 18 18 13 25 18 25 26 18 13 40 11 11 30 35 5 8 35 22 4 4 5 6 5 5 34 14 6 6 37 3 30 2 20 11 28

This booklet is published by FHPKF Publishers (Pty) Ltd for and on behalf of

chartered accountants & business advisers

Allinformationcontainedhereinisbelievedtobecorrectatthetimeofpublication,23February2011. Thecontentsshouldnotbeusedasabasisforactionwithoutfurtherprofessionaladvice. Whileeverycarehasbeentakeninthecompilationofthispublicationnoresponsibilityshallbe acceptedforanyinaccuracies,errorsoromissions. Theinformationispreparedfromthebudgetspeechandthelegislationfinallyenactedmaydiffer considerably. Changesinratesoftaxannouncedinthebudgetspeechforthetaxyear2012becomeeffectiveonly oncethelegislationisenactedbyParliament. Copyrightsubsistsinthiswork.Nopartofthisworkmaybereproducedinanyformorbyanymeans withoutthepublisherswrittenpermission.

1

BUDGET1

PROPOSALS

Retirement Funding

From1March2012,anemployerscontributiontoretirementfunding willbetreatedasafringebenefit.Employeeswillbeallowedtodeduct upto22,5%oftaxableincomeforcontributionstopension,provident andretirementannuityfunds,subjecttoaminimumofR12000anda maximumofR200000peryear. From1March2012,monthlycontributionstomedicalschemesand qualifyingmedicalexpenseswillbeconvertedintotaxcreditsandnot treatedasdeductions. Duetothecostofcomplianceandcomplexity,itisproposedthatthe capitalgainchargeforforeigncurrencyberemovedforindividuals. ThecurrentlearnershiptaxincentivewillexpireinSeptember2011. Ithasbeenproposedtoextendthisforafurtherfiveyears,subjectto ananalysisofitseffectivenessbyallstakeholders. Ayouthemploymentsubsidyintheformofataxcredittobe administeredthroughthePAYEsystemhasbeenproposed. From1March2012,microbusinessesregisteredforVATwillno longerbepreventedfromregisteringforturnovertax. From1April2012,allgamblingwinnings,includingtheNationalLottery, overR25000willbesubjecttoafinalwithholdingtaxof15%. ThisBillwillbeintroducedintheNationalAssemblyduring2011.

2

Medical Deductions

3 4

Foreign Currency Capital Gain Learnership Allowances

5 6 7 8

Youth Employment Subsidy Micro Businesses Gambling

Tax Administration Bill

VOLUNTARY

DISCLOSUREPROGRAMME

Taxpayersareencouragedtomakedisclosureandregulariseboththeirtax andexchangecontroldefaultsbefore31October2011. Adefaultwascommittedifthetaxpayerfailedtosubmitinformationor returnsorhassubmittedinaccurateinformationtoSARSand/orSARB before17February2010and28February2010respectively.Shouldany uncertaintyexistastowhethertheapplicantqualifiesunderthetaxVDP, ananonymousapplicationmaybelodgedwithSARS.Thedefaultmaynot resultinarefundSARS.FurthermoreSARSmustnothavebeenawareof thisdefault.Ifthetaxpayeriscurrentlybeinginvestigated,limitedrelIefmay stillbeavailable.TheVDPcanbewithdrawnshoulditbeascertainedthat thedisclosurewasnotcompleteinallmaterialrespects. Thecapitalamountoftaxisstillpayable.Interest(limitedto50%ifthe applicantisunderinvestigation),penalties(apartfromadministrative penalties)andadditionaltaxwillbewaivedandnocriminalprosecution willbeinstitutedagainstthetaxpayer.Forexchangecontrolpurposesthe applicantmaybeliabletopaya10%levyifpaidfromforeignfundsanda 12%levyifpaidfromlocalfunds. 2

DIVIDENDS

TAX

Dividendstax,applicabletoSouthAfricanresidentcompanies,willcomeinto operationon1April2012. Dividendstaxwillbebornebytheshareholderatarateof10%(subjectto anyreductionintermsofdoubletaxationagreements).

Exemptions from Dividends Tax

Thefollowingshareholdersareexemptfromdividendstax:SouthAfrican residentcompanies,theGovernment,PBOs,certainexemptbodies, rehabilitationtrusts,pension,providentandsimilarfunds,shareholdersina registeredmicrobusiness,providedthedividenddoesnotexceedR200000 inayearofassessment,anaturalpersonuponreceiptofaninterestina qualifyingresidencebefore31December2012andanon-residentreceivinga dividendfromanon-residentcompanywhichislistedontheJSE,i.e.aduallistedcompany.

Withholding Tax Obligations

Dividendstaxinitiallyrequiresthecompanydeclaringthedividendtowithhold dividendstaxonpayment.Liabilityforwithholdingtaxshiftsifthedividendis paidtoaregulatedintermediarywhichincludescentralsecuritiesdepositoryparticipants,brokers,collectiveinvestmentschemes,approvedtransfer secretariesandlistedinvestmentserviceproviders.Dividendstaxcanbe eliminatedorreduceduponthetimelyreceiptofawrittendeclarationthatthe shareholderisentitledtoanexemptionortotaxtreatyreliefrespectively.

Use of Unutilised STC Credits Revised Dividend Definition

UnutilisedSTCcreditsmustbeutilisedwithinfiveyearsofthechangeover tothedividendstaxsystem.STCcreditswillbeexhaustedfirst. Asfrom1January2011,thedefinitionofadividendhasbeensimplified andincludesalldistributionstoashareholderotherthanareductionof contributedtaxcapital(whichconsistsofuntaintedsharepremiumandshare capitalofacompany),capitilisationissues,asharebuy-backofaJSElisted company,oraredemptionofaparticipatoryinterestinaforeigncollective investmentscheme. Inorderforadistributionofcontributedtaxcapitalnottoberegardedasa dividendthedirectorsmust,immediatelypriortothedistribution,recordin writingthatcontributedtaxcapitalisbeingdistributed.

Introduction of Value-Extraction Tax (VET)

Thisisananti-avoidancemeasuresimilartothedeemeddividendprovisions whichwillbeintroducedwhendividendstaxiseffective.Itisaseparatetax leviedonthecompanyandnottheshareholder.VETarisesonlyinrespectof SouthAfricanresidentcompaniesseekingtoextractvaluewithoutdeclaring dividendsandiscalculatedat10%ofthevalueextracted.Itisapplicable whereacompanyprovideslowinterestloansoradvancestoapersonwhois connectedtothecompany,releasesorrelievesloanspreviouslymadetosuch connectedperson,settlesaloanowedtoathirdpartybysuchconnected personorceasestobeaSouthAfricanresident.

Passive Holding Company

Topreventtheuseofprivateinvestmentcompaniesavoidingthepayment ofdividendstax,passiveholdingcompanies,whichearnmorethan80% oftheirgrossincomeintheformofinterest,dividendsandotherpassive incomederivedfromfinancialinstrumentsandinwhichmorethan50%of theparticipationrightsareheldbyfiveorlessresidentnaturalpersons,will betaxedat10%ontheirdividendincomeandatarateof40%ontheirother taxableincome,butwillnotberequiredtosubjectdividendstheydeclareto thedividendstax. 3

TAX RATES COMPANIESForyearsofassessmentendingduringthefollowingperiods: 1April1993-31March1994 1April1994-31March1999 1April1999-31March2005 1April2005-31March2008 1April2008-31March2012 40% 35% 30% 29% 28%

Note:CompaniesqualifyingundertheTaxHolidaylegislation(Section37H) weresubjecttotaxat0%.TheTaxHolidayendedon30September1999.

Branch Profits TaxForyearsofassessmentendingduringthefollowingperiods: 1April1996-31March1999 1April1999-31March2005 1April2005-31March2008 1April2008-31March2012 40% 35% 34% 33%

Note:Asfromyearsofassessmentendingonorafter31March2008these ratesapplytotheprofitsofanon-residentcompany.

STCDividenddeclaredonorafter Dividenddeclaredonorafter Dividenddeclaredonorafter Dividenddeclaredonorafter 17March1993 22June1994 14March1996 1October2007 15% 25% 12,5% 10%

TAX IMPACT COMPANIES Taxableincome Less:Normaltax Less:STC Availablefordistribution Totaltaxpaid Effectiverateoftax Tax year 2009 2010 RR 100,00100,00 28,0028,00 72,0072,00 6,556,55 65,4565,45 34,5534,55 34,55%34,55% 2011 R 100,00 28,00 72,00 6,55 65,45 34,55 34,55% 2012 R 100,00 28,00 72,00 6,55 65,45 34,55 34,55%

Assumesallprofitsaredeclaredasdividends 4

TAX RATES INDIVIDUALS-2011Taxable incomeR0-R140000 R140001-R221000 R221001-R305000 R305001-R431000 R431001-R552000 R552001+ 18%ofeachR1 R25200+25%oftheamountover R45450+30%oftheamountover R70650+35%oftheamountover R114750+38%oftheamountover R160730+40%oftheamountover

Rates of tax

R140000 R221000 R305000 R431000 R552000

TAX RATES INDIVIDUALS-2012Taxable incomeR0-R150000 R150001-R235000 R235001-R325000 R325001-R455000 R455001-R580000 R580001+ 18%ofeachR1 R27000+25%oftheamountover R48250+30%oftheamountover R75250+35%oftheamountover R120750+38%oftheamountover R168250+40%oftheamountover

Rates of tax

R150000 R235000 R325000 R455000 R580000

TAX THRESHOLDSPersonsunder65 Persons65andunder75 Persons75andover 2011 R57000 R88528 R88528

Taxable income

2012 R59750 R93150 R104261

TAX REBATESAmounts deductible from the tax payable Personsunder65 Persons65andunder75 Persons75andover 2011 R10260 R15935 R15935 2012 R10755 R16767 R18767

Theserebatesarenotavailabletoeithernormalorspecialtrusts,and companies.

SKILLS DEVELOPMENTLEVYTheSkillsDevelopmentActseekstorestructuretheexistingtrainingsystem andupgradethelevelofskillsandaccesstoskillsbyworkers. Directorsremuneration,onthesamebasisasforPAYE,willbesubjecttothe SkillsDevelopmentLevy. TheSkillsDevelopmentLevyispayablebyemployersatarateof1%of remunerationasfrom1April2001(previously0,5%). EmployerspayingannualremunerationoflessthanR500000areexempt fromthislevyasfrom1August2005. 5

TAX RATES TRUSTS-2011AND2012Taxable income Alltaxableincome Rate of tax 40%ofeachR1

Specialtrustsaretaxedattheratesapplicabletoindividuals. Aspecial trustisonecreatedsolelyforthebenefitofapersonaffectedby amentalillnessorseriousphysicaldisabilitywhichpreventsthatperson fromearningsufficientincometomaintainhimself,oratestamentarytrust establishedsolelyforthebenefitofminorchildrenwhoarerelativesofthe deceased.Wherethepersonforwhosebenefitthetrustwasestablished diespriortooronthelastdayoftheyearofassessmentortheyoungest beneficiary,inthecaseofatestamentarytrust,turns21yearsofageprior tooronthelastdayoftheyearofassessment,thetrustwillnolongerbe regardedasaspecialtrust.

TRUSTS LOSSESAlossincurredbyatrustcannotbedistributedtobeneficiaries.Theloss isretainedinthetrustandcarriedforwardtothenextyearasanassessed loss.

TURNOVER TAX

MICROBUSINESSES

Asfrom1March2009asimplifiedturnover-basedtaxsystemwas implementedforsmallsoleproprietors,partnershipsandincorporated businesseswithaturnoverlessthanR1millionperyear. Thisturnover-basedpresumptivetaxsystemiselective.Afterjoiningthe system,qualifyingbusinessesaretoremaininthesystemforaminimum ofthreeyears(providedtheyremainwithinthemonetarythreshold).Once abusinesshaselectedtomigrateoutofthesystem,itwillnotbeableto migratebackforaperiodofthreeyears.Personalservicesrenderedunder employment-likeconditionsandcertainprofessionalservicesareexcluded fromthistaxsystem.

TurnoverR0-R100000 R300001-R500000 R500001-R750000 R750001-R1000000

Rates of taxNil

2011

R100001-R300000 %oftheamountoverR100000 1 R2000+3%oftheamountoverR300000 R8000+ %oftheamountoverR500000 5 R20500+7%oftheamountoverR750000

TurnoverR0-R150000 R300001-R500000 R500001-R750000 R750001-R1000000

Rates of taxNil

2012

R150001-R300000 %oftheamountoverR150000 1 R1500+3%oftheamountoverR300000 R7500+ %oftheamountoverR500000 5 R20000+7%oftheamountoverR750000 6

TAXATION DEEMEDEMPLOYEESLabour brokers andpersonalserviceprovidersareregardedasdeemed employees. Foryearsofassessmentcommencingonorafter1March2009: A labour brokerisanaturalpersonwho,forreward,providesaclient withotherpersonstorenderaservicefortheclientorprocures otherpersonsfortheclientandremuneratessuchpersons. A personal service providerisacompany(includingaclose corporation)ortrustwhereanyservicerenderedonbehalfofthe entitytoitsclientisrenderedpersonallybyanypersonwhoisa connectedpersoninrelationtosuchentity,andoneofthefollowing provisionsapply: - thepersonwouldhavebeenregardedasanemployeeofthe client,iftheservicewasnotrenderedthroughanentity;or - thepersonorentityrenderingtheservicemustperformsuch servicemainlyatthepremisesoftheclientandsuchpersonor entityissubjecttothecontrolorsupervisionofsuchclientasto themannerinwhichthedutiesareperformed;or - morethan80%oftheincomederivedfromservicesrenderedis receivedfromoneclientorassociatedpersoninrelationtothe client. Theentitywill,however,notberegardedasapersonal service provider wheresuchentityemploysthreeormorefull-time employeesthroughouttheyearofassessment,noneofwhomare connectedpersonsinrelationtosuchentity. Implications Alabourbrokernotinpossessionofanexemptioncertificatewill besubjecttoPAYEonincomereceivedattheratesapplicableto individualtaxpayers.Deductionsofexpenditurewillbelimitedto remunerationpaidtoemployees. ApersonalserviceproviderwillbesubjecttoPAYEattherateof 33%(2008:34%)inthecaseofacompanyand40%inthecase ofatrust. NoPAYEwillberequiredtobedeductedwheretheentityprovides anaffidavitconfirmingthatitdoesnotreceivemorethan80%ofits incomefromonesource. ThedeemedemployeemayapplytoSARSforataxdirectivefora lowerrateoftax. Deductionsavailabletopersonalserviceproviderswillbelimitedto remunerationtoemployees,contributionstopension,providentand benefitfunds,legalexpenses,baddebts,expensesinrespectof premises,financecharges,insurance,repairs,fuelandmaintenance inrespectofassetsusedwhollyandexclusivelyfortradeandany amountpreviouslyincludedintaxableincomeandsubsequently refundedbytherecipient.7

TAXATION SMALLBUSINESSCORPORATIONSYearsofassessmentendingbetween1April2010and31March2011 R0-R57000 Nil R57001-R300000 10%oftheamountoverR57000 R300001+ R24300+28%oftheamountoverR300000

Taxable income

Rates of tax

Yearsofassessmentendingbetween1April2011and31March2012

Taxable income

Rates of tax

R0-R59750 Nil R59751-R300000 10%oftheamountoverR59750 R300001+ R24025+28%oftheamountoverR300000

Applies if: Allshareholdersormembersthroughouttheyearofassessmentare naturalpersonswhoholdnosharesinanyotherprivatecompaniesor membersinterestinanyotherclosecorporationsorco-operativesother thanthosewhich: - areinactiveandhaveassetsoflessthanR5000;or - havetakenstepstoliquidate,winduporderegister(effectivefor yearsofassessmentcommencingonorafter1January2011). GrossincomefortheyearofassessmentdoesnotexceedR14million (2006:R6million) Notmorethan20%ofthegrossincomeandallthecapitalgains consistcollectivelyof investment incomeandincomefromrendering a personal service. Investment income includesanyannuity,interest,rentalincome,royalty oranyincomeofasimilarnature,aswellasdividendsandanyproceeds derivedfrominvestmentortradinginfinancialinstruments(including futures,optionsandotherderivatives),marketablesecuritiesor immovableproperty. Personal serviceincludesanyserviceinthefieldofaccounting, actuarialscience,architecture,auctioneering,auditing,broadcasting, consulting,draughtsmanship,education,engineering,financialservice broking,health,informationtechnology,journalism,law,management, realestatebroking,research,sport,surveying,translation,valuationor veterinaryscience,whichisperformedpersonallybyanypersonwho holdsaninterestinthecompanyorclosecorporation,exceptwhere suchsmallbusinesscorporationemploysthreeormoreunconnected full-timeemployeesforcoreoperations. Thecompany,co-operativeorclosecorporationisnotanemployment entity.

Investment incentiveThefullcostofanyassetusedinaprocessofmanufactureandbroughtinto useforthefirsttimeonorafter1April2001,maybedeductedinthetax yearinwhichtheassetisbroughtintouse.Asfrom1April2005,allother depreciableassetsarewrittenoffona50:30:20basis. 8

EXEMPTIONS

INDIVIDUALS

DividendsreceivedoraccruedfromSouthAfricancompaniesare generallynotsubjecttotax. Allinterestreceivedbyoraccruedtonon-residentsisexemptfromtax providedtheindividualisphysicallyabsentfromSouthAfricaforatleast 183daysordidnotcarryonbusinessinSouthAfricathrougha permanentestablishmentduringtheyearofassessment. Interestreceivedbyresidentnaturalpersons: Personsunder65years R22800 (2011:R22300) Personsaged65yearsandover R33000 (2011:R32000) Interestincludesdistributionsfrompropertyunittrustsandforeign interestanddividends.Theforeigninterestanddividendexemptionis limitedtoR3700(2010:R3500). Unemploymentinsurancebenefits.

Termination Lump Sum from Employer

Asfrom1March2011employerprovidedseverancepaymentsforreasons ofage,illhealthandretrenchmentarealignedwiththetaxationoflump sumbenefits,includingtheR315000(2011:R300000)exemption.This exemptiondoesnotapplytodirectorsofcompaniesormembersofclose corporationsiftheyatanytimeheldaninterestofmorethan5%inthat entity. Priorto1March2011aonceoffexemptionofR30000appliedwherean employeehadreachedtheageof55yearsortheterminationofservices wasduetoillhealthortheemployeewasretrenchedbecausetheemployer hadceasedtooperateorbecauseofareductioninpersonnel.

Compensation

Asfrom1March2007,compensationawardspaidbyanemployeronthe deathofanemployeeinthecourseofemploymentwillbeexempttothe extentofR300000lessanypreviousretrenchmentexemptionenjoyedby thatemployee.

DEDUCTIONS EMPLOYEESSalariedemployeesorholdersofofficearerestrictedtodeductingthe followingexpenditurefromtheirremuneration: Baddebtsallowance Deductionsinrespectofcontributionstoapensionfundorretirement annuity fund DonationstocertainPublicBenefitOrganisations Doubtfuldebtsallowance Homeofficeexpenses,subjecttorequirements Legalexpenses Medicalexpensesandmedicalaidcontributions Premiumspaidintermsofanallowableinsurancepolicy - totheextentthatthepolicycoversthepersonagainstlossof incomeasaresultofillness,injury,disabilityorunemployment,and - inrespectofwhichallamountspayableintermsofthepolicy constitutesincomeasdefined Refundedawardsforservicesrenderedandrefundedrestraintoftrade awardsasfrom1March2008 Wearandtearallowance. 9

DEDUCTIONS INDIVIDUALSCurrent Pension Fund Contributions7,5%ofremunerationfromretirement-fundingemploymentorR1750, whicheveristhegreater.Retirement-fundingemploymentreferstoincome whichistakenintoaccounttodeterminecontributionstoapensionor providentfund. Excesscontributionsarenotcarriedforwardtothenextyearofassessment butareaccumulatedforthepurposeofdeterminingthetax-freeportionof thelumpsumuponretirement.

Arrear Pension Fund Contributions

UptoamaximumofR1800peryear.Anyexcessmaybecarriedforward.

Current Retirement Annuity Fund Contributions

15%oftaxableincomefromnon-retirement-fundingemployment,orR3500 lesscurrentcontributionstoapensionfund,orR1750,whicheveristhe greater.Anyexcessmaybecarriedforward.

Reinstated Retirement Annuity Fund Contributions Medical Expenses and Medical Aid Deductions

UptoamaximumofR1800peryear.Anyexcessmaybecarriedforward. 65 years and older:Mayclaimallqualifyingexpenditureincurredand medicalaidcontributionspaidbythetaxpayeroremployer. Younger than 65 years:Mayclaimmedicalaidcontributions,paidby thetaxpayeroremployer,uptothecappedamountandqualifying expendituretotheextentthatitexceeds7,5%oftaxableincomebefore thisdeduction. Younger than 65 years (but with an immediate family member who has a disability):Ifthetaxpayer,spouseorchild(includinganadopted childorstepchild)hasadisability,thedeductionincludesallqualifying expenditureandmedicalaidcontributionspaidbythetaxpayeror employer. ThecappedamountiscalculatedatR720(2011:R670)foreachofthe firsttwobeneficiariesandR440(2011:R410)foreachadditional beneficiaryasdefinedbythemedicalaidfund. Qualifyingexpenditureincludes: - owncontributionstomedicalaidfundsinexcessofcappedamount - medicalaidfringebenefitdeterminedbytheemployerinexcessof cappedamount - paymentstomedicalpractitioners,nursinghomesandhospitals - paymentstopharmacistsforprescribedmedicines - paymentsforphysicaldisabilities,includingremedialteachingand expenditureincurredformentallyhandicappedpersons - paymentsforthebenefitofanydependents. Disabilitymeansamoderatetoseverelimitationofapersonsabilityto functionorperformdailyactivitiesasaresultofphysical,sensory, communication,intellectualormentalimpairment,ifthelimitationlasts morethanayearandisdiagnosedbyaregisteredmedicalpractitioner. Recoveriesofexpenses(includingamountsreceivedfrommedicalaid savingsaccount)reducetheclaim. Expenditurepaidbyataxpayeronbehalfofaspouseorchildrenmust beclaimedbythespousewhopaidtheexpense. 10

RETIREMENT LUMPSUMBENEFITSAsfrom1October2007,thetaxable portionofalumpsumfromapension, providentorretirementannuityfundonretirementordeathisthelumpsum lessanycontributionsthathavenotbeenallowedasataxdeductionplus the taxable portion of all lump sums previously received.Thisamountis subjecttotaxatthefollowingratesless any tax previously paid:

Taxable portion of lump sum

Rates of tax

R0-R315000 0% R315001-R630000 1 8%oftheamountoverR315000 R630001-R945000R56700+27%oftheamountoverR630000 R945001+ R141750+36%oftheamountoverR945000 Thetaxablelumpsumcannotbeset-offagainstanyassessedlossofthe taxpayer.

WITHDRAWAL

LUMPSUMBENEFITS

Asfrom1March2009,thetaxable portionofapre-retirementlumpsum fromapensionorprovidentfundisthewithdrawallessanytransfertoanew fund plus all withdrawal lump sums previously received.Thisamountis subjecttotaxatthefollowingratesless any tax previously paid:

Taxable portion of withdrawal

Rates of tax

R0-R22500 0% R22501-R600000 18%oftheamountoverR22500 R600001-R900000R103950+27%oftheamountoverR600000 R900001+ R184950+36%oftheamountoverR900000

RING-FENCED ASSESSEDLOSSESAsfrom1March2004,lossesfromsecondarytradeswillbering-fenced andwillnotbeavailableforset-offagainstincomefromanyothertrade. Itwillonlyapplytoanindividualwhosetaxableincome,beforesettingoff anyassessedlossorbalanceofassessedloss,isequaltoorexceedsthe levelatwhichthemaximumrateoftaxisapplicable. Fortherestrictionstoapplythepersonmusthaveincurredanassessedloss fromthesecondarytradeinatleastthreeyearsofassessmentduringany fiveyearperiod,orhavecarriedonanyofthefollowingsuspecttrades: Anysportingactivities Anydealingincollectables Therentalofaccommodation,vehicles,aircraftorboats(unlessatleast 80%oftheassetisusedbypersonswhoarenotrelativesofsuch personforatleasthalfoftheyearofassessment) Animalshowing Farmingoranimalbreeding(otherwisethanonafull-timebasis) Performingorcreativearts Gamblingorbetting. Thetaxpayerwillbeabletocircumventtheseprovisionsifhecanprove thatthereisareasonableprospectofderivingtaxableincomewithina reasonableperiodandwherehecomplieswithothertests,unlesslosses havebeenincurredinatleastsixoutoftenyears. 11

PROVISIONAL TAXAllprovisionaltaxpayersarerequiredtoremittwoprovisionaltaxpaymentsa year.Athirdvoluntarypaymentmaybemadetoavoidinterestbeingcharged.

First Year of Assessment

Whereataxpayerhasnotbeenassessedpreviously,areasonableestimateof thetaxableincomemustbemade.Thebasicamountcannotbeestimatedat nil,aswaspreviouspractice,unlessfullymotivated.

First Payment

Onehalfofthetotaltaxinrespectoftheestimatedtaxableincomeforthe yearispayablesixmonthsbeforethefinancialyearend.Theestimateof taxableincomemaynotbelessthanthebasicamountwithouttheconsent ofSARS.

Second Payment

Atwo-tiersystemappliesdependingonthetaxpayerstaxableincome: Actual taxable income equal to or less than R1 million Toavoidanyadditionaltaxontheunderestimationoftaxableincome thiscanbebasedonthebasicamountasdefined,orifalowerestimate isused,theestimatemustbewithin90%ofthetaxableincomefinally assessed. Actual taxable income exceeds R1 million Toavoidanyadditionaltaxontheunderestimationtheestimatemustbe within80%ofthetaxableincomefinallyassessed. Iftheaboverequirementsarenotmet,additionaltaxof20%oftheprovisional taxunderpaidmaybeimposed.

Third Payment

Thirdprovisionalpaymentsareonlyapplicabletoindividualsandtrustswith taxableincomeinexcessofR50000andcompaniesandclosecorporations withtaxableincomeinexcessofR20000.Suchpaymentsshouldbemade before30SeptemberinthecaseofataxpayerwithaFebruaryyearendand withinsixmonthsofotheryearendstoavoidinterestbeingcharged.

Basic Amount

Thebasicamountisthetaxableincomeofthelatestprecedingyearof assessmentincreasedby8%p.a.ifthatassessmentismorethanayearold.

Permissable Reductions in the Basic Amount

Capitalgainsandtaxableportionsoflumpsumsarenotincludedin thebasicamountforthefirstperiodorthesecondperiod,wherethetaxable incomeisnotexpectedtoexceedR1million.Ifhoweveranestimatelower thanthebasicamountisused,suchamountsmustbeincludedinthe estimate.Theseamountshavetobeincludedinthesecondprovisionaltax paymentswherethetaxableincomeisexpectedtoexceedR1million.

Estimates

SARShastherighttoincreaseanyprovisionaltaxestimate,evenifbasedon thebasicamount,toanamountconsideredreasonable.

Persons over 65

Personsover65years,excludingdirectorsofcompaniesandmembersof closecorporations,whosetaxableincomedoesnotexceedR120000(2009: R80000)areexemptfromprovisionaltax,providedthatsuchincomeconsists exclusivelyofremuneration,rental,interestordividends. Personsunder65yearswhodonotcarryonbusiness,andwhosetaxable incomedoesnotexceedthetaxthresholdorwhoseinterest,foreign dividendsandrentalincomedoesnotexceedR20000(2008:R10000)are exemptfromprovisionaltax.

Persons under 65

12

PRETRADING

EXPENDITURE

Thedeductionofexpenditureandlossesincurredinconnectionwith,but priortothecommencementof,tradeisallowedprovidedtheexpenditure andlossesincludingsection24Jinterestcouldhavebeendeductiblehad thetradecommenced.Suchexpenditureandlossesarering-fencedinthat theycanonlybesetoffagainstincomefromthattrade.Thebalanceis carriedforwardandcanbeclaimedinasubsequentyearofassessment.

PREPRODUCTION

INTEREST

Interestandrelatedfinancechargesincurredonanyborrowingforthe acquisition,installation,erectionorconstructionofanymachinery,plant, buildingorimprovementstoabuildingorotherassets,includingland,are deductiblewhentheassetisbroughtintouseintheproductionofincome.

BURSARIES

ANDSCHOLARSHIPS

Bona fidescholarshipsorbursariesgrantedtoenableanypersontostudy atarecognisededucationalinstitutionareexemptfromtax.Wherethe benefitisgrantedtoanemployee,theexemptionwillnotapplyunlessthe employeeagreestoreimbursetheemployerintheeventthatthestudies arenotcompleted.Wherethebeneficiaryisarelativeoftheemployee,the exemptionwillonlyapplyiftheannualremunerationoftheemployeeisless thanR100000(2007:R60000)andtotheextentthatthebursarydoesnot exceedR10000(2007:R3000).

BROAD BASED

EMPLOYEEEQUITY

Employercompaniesmayissuequalifyingsharesuptoacumulativelimit ofR50000(2008:R9000)peremployeeinrespectofthecurrenttaxyear andtheimmediatelyprecedingfour(2008:two)taxyears.Ataxdeduction limitedtoamaximumofR10000(2008:R3000)peryearperemployee willbeallowedintheemployershands.Providedtheemployeeholdsonto thesharesforatleastfiveyearstherewillbenotaxconsequencesforthe employee,otherthanCGT.

RESTRAINTGross Income

OFTRADE

Anyamountreceivedbyoraccruedtoanynaturalperson,labourbrokeror personalserviceproviderforarestraintoftradeimposedonsuchperson, shouldbeincludedintherecipientsgrossincomeintheyearofreceiptor accrual.

DeductionWhereanamountwasincurredinrespectofarestraintoftradeimposedon anyperson,thededuction,inayearofassessment,islimitedtothelesserof: theamountapportionedovertheperiodforwhichtherestraintapplies;or one-thirdoftheamountincurredperyear Nodeductionisallowedwheretheamountdidnotconstituteincomeinthe handsoftherecipient. 13

ADMINISTRATIVE

PENALTIES

Failuretosubmitcertainreturnsorinformationwillgiverisetothe followingfixedratepenalties: Assessed loss or taxable income for preceding year Assessedloss R0R250000 R250001R500000 R500001R1000000 R1000001R5000000 R5000001R10000000 R10000001R50000000 AboveR50000000 Penalty R 250 R 250 R 500 R 1000 R 2000 R 4000 R 8000 R 6000 1

Thepenaltywillautomaticallybeimposedmonthlyuntilthetaxpayer remediesthenon-compliance. Late payment of PAYE and provisional tax attracts a penalty of 10% of the amount due. ThelatesubmissionofthePAYEreconciliationattractsapenalty of 10% of the PAYE deducted for the tax year.

TRAVEL

ALLOWANCES

Fixed Travel AllowancesAsfrom1March2010,80%(2007:60%)ofthefixedtravelallowanceis subjecttoPAYE.Asfrom1March2011,wheretheemployerissatisfied thatatleast80%oftheuseofthevehiclefortheyearofassessment willbeforbusinsspurposes,theinclusionratesmaybelimitedto20%. ThefullallowanceisdisclosedontheemployeesIRP5certificate, irrespectiveofthequantumofbusinesstravel.

Reimbursive Travel ExpensesWhereanemployeereceivesareimbursementbasedontheactual businesskilometrestravelled,noothercompensationispaidtothe employeeandthecostiscalculatedinaccordancewiththeprescribed rateof305cents(2009:292cents)perkilometre,noemployeestax needbededucted,providedthebusinesstraveldoesnotexceed8000 kilometresperyear.Thereimbursementmustbedisclosedundercode 3703ontheIRP5certificate.NoPAYEiswithheldandtheamountisnot subjecttotaxationonassessment. Ifthebusinesskilometrestravelledexceed8000kilometresperyear, orifthereimbursiverateperkilometreexceedstheprescribedrate,or ifothercompensationispaidtotheemployeetheallowancemustbe disclosedseparatelyundercode3702ontheIRP5certificate.NoPAYE iswithheldbuttheamountissubjecttotaxationonassessment.14

DEDUCTIONS TRAVELEXPENSESAccuraterecordsoftheopeningandclosingodometerreadingsmust bemaintainedinallcircumstances. Priorto1March2010,intheabsenceofaccuratetravelrecords,the first18000kilometrestravelledweredeemedprivatetravelandthe maximumbusinesskilometreswhichwereclaimablewaslimitedto 14000kilometres. Asfrom1March2010,theclaimmustbebasedontheactualdistance travelledassupportedbyalogbookandthedeemedkilometres methodmaynolongerbeused.

DEEMEDEXPENDITURE-2011Cost of vehicle DoesnotexceedR40000 ExceedsR40000butnotR80000 ExceedsR80000butnotR120000 ExceedsR120000butnotR160000 ExceedsR160000butnotR200000 ExceedsR200000butnotR240000 ExceedsR240000butnotR280000 ExceedsR280000butnotR320000 ExceedsR320000butnotR360000 ExceedsR360000butnotR400000 ExceedsR400000 Fixed R 14672 29106 39928 50749 63424 76041 86211 96260 106367 116012 116012 Fuel Repairs c c 58,6 21,7 58,6 21,7 62,5 24,2 68,6 28,0 68,8 41,1 81,5 46,4 81,5 46,4 85,7 49,4 94,6 56,2 110,3 75,2 110,3 75,2

DEEMEDEXPENDITURE-2012Cost of vehicle DoesnotexceedR60000 ExceedsR60001butnotR120000 ExceedsR120001butnotR180000 ExceedsR180001butnotR240000 ExceedsR240001butnotR300000 ExceedsR300001butnotR360000 ExceedsR360001butnotR420000 ExceedsR420001butnotR480000 ExceedingR480000 Fixed R 19492 38726 52594 66440 79185 91873 105809 119683 119683 Fuel Repairs c c 64,6 26,4 68,0 29,2 71,3 31,9 77,7 35,0 87,0 44,7 93,9 54,2 100,9 65,8 113,1 67,6 113,1 67,6

DEDUCTIONS DONATIONSDonationstocertaindesignatedPBOswillqualifyforataxdeduction Individuals-limitedto10%(2007:5%)oftaxableincomebeforethe deductionofdonationsandmedicalexpenses Companies-limitedto10%(2007:5%)oftaxableincomebeforethe deductionofdonations.

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FRINGE

BENEFITS

Thecashequivalentoftaxablebenefitsgrantedtoemployeesistaxable.

Use of Company Owned Motor Vehicle

ThedeterminedvalueforthefringebenefitisthecashcostincludingVATbut excludingfinancechargesandinterest.Theemployeewillbetaxedon3.5% (2011:2.5%)permonthofthedeterminedvalueofthemotorvehiclelessany considerationpaidbytheemployeetowardsthecostofthevehicle. Thefringebenefitisreducedto3.25%if,atthetimeacquired,itissubjecttoa maintenanceplanfornolessthanthreeyearsand/or60000kilometres. Whereanemployeeisgiventheuseofmorethanonemotorvehicleandcan showthateachvehicleisusedprimarilyforbusinesspurposes,thevalue placedontheprivateuseofallthevehiclesisdeterminedaccordingtothe valueattributedtothevehiclecarryingthehighestvalueforprivateuse. ForPAYEpurposestheemployerisrequiredtoincludeintheemployees monthlyremuneration80%ofthefringebenefit.Theinclusionratemaybe limitedto20%iftheemployerissatisfiedthatatleast80%oftheuseofthe motorvehicleforayearofassessmentwillbeforbusinesspurposes. OnassessmenttheCommissionermust,providedheissatisfiedthataccurate recordshavebeenkeptinrespectofdistancestravelledfor: businesspurposes,reducethevalueofthefringebenefitbythesame proportionthatthebusinessmileagebearstothetotaldistancetravelled duringtheyearofassessment; privatepurposesandthattheemployeehasbornethecostofthefollowing vehiclerunningexpenses,reducethevalueofthefringebenefit: - bythesameproportionthatthebusinessmileagebearstothetotal distancetravelledduringtheyearofassessment,inthecaseof licence,insuranceandmaintenancecosts; - byapplyingtheprescribedrateperkilometretothekilometrestravelled forprivatepurposesinthecaseoffuelcostpertainingtoprivateuse. Novalueisplacedontheprivateuseofacompanyownedvehicleif: itisavailabletoandusedbyallemployees,privateuseisinfrequentand incidentaltothebusinessuseandthevehicleisnotnormallykeptator nearthatemployeesresidencewhennotinuseoutsidebusinesshours,or thenatureoftheemployeesdutiesrequiresregularuseofthevehicle fortheperformanceofdutiesoutsidenormalhoursofworkandprivateuse isinfrequentorincidentaltobusinessuseorlimitedtotravelbetweenplace ofresidenceandplaceofwork. Theprovisionofacompanyownedvehicleconstitutesadeemedsupplywhich attractsoutputVATforthevendoremployer. Thedeemedconsiderationisasfollows: Motorvehicle/Doublecab 0,3%ofcostofvehicle(excl.VAT)permonth Bakkies 0,6%ofcostofvehicle(excl.VAT)permonth

Medical Aid Contributions

Asfrom1March2010,thefullcontributionbyanemployerisafringebenefit. Theamountbywhichanemployerscontributiontoamedicalaidfundexceeds R720(2011:R670)foreachofthefirsttwobeneficiariesasdefinedbythe medicalaidfundandR440(2011:R410)foreachadditionalbeneficiaryis subjecttoPAYE.Iftheemployermakesalumpsumpaymentforallemployees, theeffectivebenefitisdeterminedinaccordancewithaformula,whichwillhave theeffectofapportionmentamongstallemployeesconcerned.

Subsistence Allowances

Ifanemployeeisobligedtospendatleastonenightawayfromhisusual residenceinSouthAfricaonbusiness,theemployermaypayanallowancefor personalsubsistenceandincidentalcostswithoutsuchamountsbeing includedintheemployeestaxableincome,subjecttotheemployeetravelling forbusinessbynolaterthantheendofthefollowingmonth.

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Ifsuchallowanceispaidtoanemployeeandthatemployeedoesnottravelfor businesspurposesbytheendofthefollowingmonth,theallowancebecomes subjecttoPAYEinthatmonth. Iftheallowancesdonotexceedtheamountsorperiodsdetailedbelow,the totalallowancemustbereflectedundercode3714ontheIRP5certificate. Wheretheallowancesexceedtheamountsorperiodsdetailedbelow,thetotal allowancemustbereflectedundercode3704(local)or3715(foreign)onthe IRP5certificate.Thefollowingamountsaredeemedtohavebeenexpended byanemployeeinrespectofasubsistenceallowance: Local travel 88(2011:R85)perdayorpartofadayforincidentalcosts;or R 286(2011:R276)perdayorpartofadayformealsandincidentalcosts. R Whereanallowanceispaidtoanemployeetocoverthecostofaccommodation,mealsorotherincidentalcosts,theemployeehastoprovehowmuch wasspentwhileawayonbusiness.Thisclaimislimitedtotheallowance received. Overseas travel Actualaccommodationcostsplusanallowancepercountryassetouton www.sars.gov.za(2009:$215)perdayformealsandincidentalcostsincurred outsideSouthAfrica.Thedeemedexpenditurewillnotapplywherethe absenceisforacontinuousperiodinexcessofsixweeks.

Low Interest/Interest-Free Loans

Asfrom1March2011theamounttaxedisthedifferencebetweeninterest payableontheloanbytheemployeeandtherepo-rate+1% (2010:officialinterestrate). Short-termloans,whicharebelowR3000,arenottaxablebenefits Aloantotheemployeetoenablehimtofurtherhisownstudiesisnota taxablebenefit.

Holiday Accommodation

Theemployeeistaxedontheprevailingmarketrateifthepropertyisowned bytheemployerorrentedfromanassociatedentity;ortheactualrentalifthe employerrentedtheaccommodation.

Long Service and Bravery Awards

ThefirstR5000ofthevalueofanyassetawarded,excludingcash,isnot subjecttotax.

Use of Business Cellphones and Computers

Asfrom1March2008notaxablevaluewillbeplacedontheprivateuseby employeesofemployer-ownedcellphonesandcomputerswhichareused mainlyforbusinesspurposes.

Residential Accommodation Supplied by Employer

Asfrom1March1999,whereaccommodationisprovidedtoanemployeeand isnotownedbytheemployerorassociatedentity,thevalueofthefringe benefittobetaxedshallbethegreateroftheformulavalueortherentaland otherexpensespaidbytheemployer. Ifhousingisprovidedforabona fidebusinesspurposewhereitiscustomary toprovidefreeorsubsidisedaccommodationtoemployeesanditisnecessaryfortheparticularemployertoprovidefreeaccommodationforproper performanceoftheemployeesdutiesorasaresultoffrequentmovementof employeesorlackofexistingaccommodationtheformulamaybeused. Asfrom1March2008,norentalvaluewillbeplacedonthe: supplyofaccommodationtoanemployeeawayfromhisusualplaceof residenceinSouthAfricafortheperformingofduties supplyofaccommodationinSouthAfricatoanemployeeawayfromhis sualplaceofresidenceoutsideSouthAfricaforatwoyearperiod.This u concessiondoesnotapplyiftheemployeewaspresentinSouthAfricafor morethan90daysinthetaxyearpriortothedateofarrivalforthepurpose ofhisduties.ThereisamonthlymonetarycapofR25000.

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RELOCATION OF ANEMPLOYEEThefollowingitemsofexpenditurebornebytheemployerforrelocation, appointmentorterminationareexemptfromtax: transportationoftheemployee,membersofhishouseholdandpersonal possessions hiringtemporaryresidentialaccommodationfortheemployeeand membersofhishouseholdforupto183daysaftertransfer suchcostsasSARSmayallow,e.g.newschooluniforms,replacementof curtains,bondregistrationandlegalfees,transferduty,motorvehicle registrationfees,cancellationofbondandagentsfeeonsaleofprevious residence Expenseswhichdonotqualifyarelossonsaleofthepreviousresidenceand architectsfeesfordesignoforalterationstoanewresidence.

PUBLIC BENEFITORGANISATIONSAnorganisationqualifiesasaPBOifitcarriesoutpublicbenefitactivitiesina non-profitmannersubstantiallyinSouthAfrica. TheannualtradingincomeexemptionforPublicBenefitOrganisationsis R200000(2010:R150000).

RECREATIONAL

CLUBS

Arecreationalclubisanon-profitorganisationwhichprovidessocialand recreationalamenitiesorfacilitiesforitsmembers. TheannualtradingincomeexemptionforrecreationalclubsisR120000 (2010:R100000).

RESIDENTIAL BUILDINGAsset type Residential buildings Employee housing Employee housing loans Conditions for annual allowance

ALLOWANCESAnnual allowance

Buildingprojectserectedonorafter1April1982 2%ofcostandan andbefore21October2008consistingofatleastinitialallowanceof fiveunitsofmorethanoneroomintendedfor 10%ofcost letting,oroccupationbybonafidefull-time employees Newandunusedbuildingsacquired,erectedor improvedonorafter21October2008ifsituated anywhereinSouthAfricaandownedbythetax- payerforuseinhistradeeitherforlettingoras employeeaccommodation. nhancedallowances E areavailablewherethelowcostresidentialunit issituatedinanurbandevelopmentzone 50%ofthecostsincurredorfundsadvancedor donatedtofinancetheerectionofhousingfor employeesonorbefore21October2008 subjecttoamaximumperdwelling Allowanceonamountsowingoninterestfree loanaccountinrespectoflowcostresidential unitssoldatcostbythetaxpayertoemployees andsubjecttorepurchaseatcostonlyincaseof repaymentdefaultorterminationofemployment 5%ofcostor10% ofcostforlowcost residentialunitsnot exceedingR200000 forastandaloneunit orR250000inthe caseofanapartment R6000priorto 1March2008 R15000between 1March2008and 20October2008 10%ofamount owingattheend ofeachyearof assessment

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CAPITAL INCENTIVE ALLOWANCESAsset type Industrialbuildings orimprovements Newcommercial buildings(otherthan residential accommodation) (note1) Buildinginanurban developmentzone (note1) Hotelbuildings Hotelequipment Aircraft Farmingequipment Ships Plantandmachinery Plantandmachinery (smallbusiness corporationsonly) Non-manufacturing assets(smallbusiness corporationsonly) Licences Conditions for annual allowance Constructionofbuildingsorimprovementson orafter1January1989,providedbuilding isusedwhollyormainlyforcarryingon processofmanufactureorsimilarprocess Constructionofbuildingsorimprovementsonor after1July1996to30September1999andthe buildingsortheimprovementsarebroughtinto usebefore31March2000andusedinaprocess ofmanufactureorsimilarprocess Annual allowance 5%ofcost (previously2%) (note3) 10%ofcost (note3)

Anycostincurredinerectinganynewand 5%ofcost unusedbuilding,orimprovinganexistiing buildingonorafter1April2007whollyormainly usedforthepurposesofproducingincomeinthe courseoftrade Costsincurredinerectingorextendingabuilding inrespectofdemolishing,excavatingtheland,or toprovidewater,powerorparking,drainageor security,wastedisposaloraccesstothebuilding Improvementstoexistingbuildings Constructionofbuildingsorimprovements, providedusedintradeashotelkeeperorused by lessee in trade as hotelkeeper Refurbishments(note2)whichcommenced onorafter17March1993 Machinery,implements,utensilsorarticles broughtintouseonorafter16December1989 Acquiredonorafter1April1995 Machinery,implements,utensilsorarticles (otherthanlivestock)broughtintouseonor after1July1988.Biodieselplantandmachinery broughtintouseafter1April2003 SouthAfricanregisteredshipsusedfor prospecting,miningorasaforeign-going ship,acquiredonorafter1April1995 Neworunusedmanufacturingassetsacquired onorafter1March2002willbesubjecttowear andtearallowancesoverfouryears 20%infirstyear 8%ineachofthe 10subsequentyears 20%ofcost 5%ofcost 20%ofcost 20%ofcost 20%ofcost(note3) 50%infirstyear 30%insecondyear 20%inthirdyear 20%ofcost (note3) 40%in1styear 20%ineachofthe 3subsequentyears (note4)

Newandunusedplantormachinerybroughtinto 100%ofcost useonorafter1April2001andusedbythetax- payerdirectlyinaprocessofmanufacture Acquiredonorafter1April2005 Expenditure,otherthanforinfrastructure, toacquirealicencefromagoverment bodytocarryontelecommunicationservices, e xploration,productionordistributionof petroleumortheprovisionofgamblingfacilities 50%infirstyear 30%insecondyear 20%inthirdyear Evenlyoverthe periodofthelicence, subjecttoa maximumof 30years

Notes: 1 Allowancesavailabletoownersasusersofthebuildingoraslessors/financiers 2 Refurbishmentisdefinedasanyworkundertakenwithintheexistingbuildingframework 3 Recoupmentsofallowancescanbedeductedfromthecostofthereplacementasset 4 hereplantandmachineryisusedinaprocessofmanufactureorasimilarprocess, W thetaxpayerisobligedtomakeuseoftheallowancesandnotthewearandtearrates

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WEAR AND TEARType of asset No. of years for write-off6 6 5 10 25 20 20 15 15 4 6 25 6 5 4 4 3 4 5 5 6 10 2 6 5 6 5 4 5 3 3 1 2 4 3 10 6 5 4 4 6 5 3 5

ALLOWANCES

ThefollowingratesofwearandtearareallowedbySARSintermsof InterpretationNote47: Type of asset No. of years for write-off6 6 6 5 20 4 3 6 6 5 3 12 6 4 4 4 4 6 6 5 6 6 4 6 5 15 4 6 6 2 5 4 1 10 5 6 6 6 5 6 6 6 6 5 6 5 5

Addingmachines Air-conditioners window mobile roomunit Air-conditioningassets absorptiontypechillers airhandlingunits centrifugalchillers coolingtowers condensingsets Aircraft(lightpassengeror commercialhelicopters) Arcweldingequipment Artefacts Balers Batterychargers Bicycles Boilers Bulldozers Bumpingflaking Carports Cashregisters Cellphoneantennae Cellphonemasts Cellulartelephones Cheque-writingmachines Cinemaequipment Colddrinkdispensers Communicationsystems Compressors Computers mainframe personal Computersoftware (mainframes) purchased self-developed Computersoftware (personalcomputers) Concretemixersportable Concretetransitmixers Containers Cropsprayers Curtains Debarkingequipment Deliveryvehicles Demountablepartitions Dentalanddoctorsequipment Dictaphones Drillingequipment(water)

Drills Electricsaws Electrostaticcopiers Engravingequipment Escalators Excavators Faxmachines Fertiliserspreaders Firearms Fireextinguishers(looseunits) Firedetectionssystems Fishingvessels Fittedcarpets Foodbins Food-conveyingsystems Fork-lifttrucks Front-endloaders Furnitureandfittings Gantrycranes Gardenirrigationequipment (movable) Gascuttingequipment Gasheatersandcookers Gearboxes Gearshapers Generators(portable) Generators(standby) Graders Grindingmachines Guillotines Gymnasiumequipment Cardiovascular Healthtesting Weightsandstrength Spinning Other Hairdressersequipment Harvesters Heatdryers Heatingequipment Hotwatersystems Incubators Ironingandpressing equipment Kitchenequipment Knittingmachines Laboratoryresearch equipment Lathes Laundromatequipment Lawreports 20

Type of asset

No. of years for write-off

Type of asset

No. of years for write-off

Liftinstallations 12 Medicaltheatreequipment 6 Millingmachines 6 Mobilecaravans 5 Mobilecranes 4 Mobilerefrigerationunits 4 Motors 4 Motorcycles 4 Motorisedchainsaws 4 Motorisedconcretemixers 3 Motormowers 5 Musicalinstruments 5 Navigationsystems 10 Neonsignsandadvertising boards 10 Officeequipment-electronic 3 Officeequipment-mechanical 5 Oxygenconcentrators 3 Ovensandheatingdevices 6 Ovensforheatingfood 6 Packagingequipment 4 Paintings(valuable) 25 Pallets 4 Passengercars 5 Patterns,toolinganddies 3 Pelletmills 4 Perforatingequipment 6 Photocopyingequipment 5 Photographicequipment 6 Planers 6 Pleasurecraft,etc 12 Ploughs 6 Portablesafes 25 Powertools(hand-operated) 5 Powersupply 5 Publicaddresssystems 5 Pumps 4 Racehorses 4 Radarsystems 5 Radiocommunication 5 Refrigeratedmilktankers 4 Refrigerationequipment 6 Refrigerators 6

Runwaylights5 Sanders 6 Scales 5 Securitysystemsremovable 5 Seedseparators 6 Sewingmachines 6 Shakers 4 Shopfittings 6 Solarenergyunits 5 Specialpatternsandtooling 2 Spindryers 6 Spotweldingequipment 6 Stafftrainingequipment 5 Surgebins 4 Surveyors: Fieldequipment 10 Instruments 5 Tape-recorders 5 Telephoneequipment 5 Televisionandadvertisingfilms 4 Televisionsets,video machinesanddecoders 6 Textbooks 3 Tractors 4 Trailers 5 Traxcavators 4 Trollies 3 Trucks(heavy-duty) 3 Trucks(other) 4 Truck-mountedcranes 4 Typewriters 6 Vendingmachines(including videogamemachines) 6 Videocassettes 2 Warehouseracking 10 Washingmachines 5 Waterdistillationand purificationplant 12 Watertankers 4 Watertanks 6 Weighbridges(movableparts) 10 Wirelinerods 1 Workshopequipment 5 X-rayequipment 5

Notes1 2 3 4 5 W earandtearmaybeclaimedoneitheradiminishingvaluemethodoronastraight- l inebasis,inwhichcasecertainrequirementsapply R emovalcostsincurredinmovingbusinessassetsfromonelocationtoanotherare n otdeductibleastheseareregardedasbeingcapitalinnature.Wearandtearmay b eclaimedovertheremainingusefulllifeoftheassets W henanassetisacquiredfornoconsideration,awearandteardeductionmaybe c laimedonitsmarketvalueatdateofacquisition W hereanassetisacquiredfromaconnectedperson,wearandtearmayonlybe claimedontheoriginalcosttothesellerlessallowancesclaimedbytheconnected personplusrecoupmentsandCGTincludedinthesellersincome T heacquisitionofsmallitemsatacostoflessthanR7000(2009:R5000)peritem m aybewrittenoffinfullduringtheyearofacquisition

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STRATEGIC ALLOWANCESAsset type Strategicprojects (note)

Conditions for annual allowance

Annual allowance

Anadditionalindustrialinvestmentallowanceis 100%ofcost allowedonnewandunusedassetsusedforpreferredqualifyingstrategicprojectswhichwere approvedbetween31July2001and31July2005 Anyotherqualifyingstrategicprojects 50%ofcost Newandunusedstructurescontractedfor andconstructioncommencedonorafter 23February2000 Newandunusedstructurescontractedfor andconstructioncommencedonorafter 23February2000 Constructioncommencedonorafter 1April2001 Broughtintouseonorafter1January2008 Broughtintouseforthefirsttimebythetaxpayer onorafter1January2008 Asfrom8January2008fornewandunusedassets Environmentaltreatmentandrecyclingassets Environmentalwastedisposalassetsofa permanentnature 10%ofcost

Pipelines Electricityand telephonetrans- missionlinesand railwaytracks

5%ofcost

Airporthangars andrunways Rollingstock Portassets Environmental assets

5%ofcost 20%ofcost 5%ofcost 40%in1styear 20%ineachofthe 3subsequentyears 5%ofcost

Energyefficiency Allformsofenergyefficiencysavingsasreflected Determinedin savings onanenergysavingscertificateinanyyearof accordancewitha assessmentendingbefore1January2020 formula Note: Theallowanceislimitedtotheincomederivedfromtheindustrialprojectandtheexcessis deductiblein heimmediatelysucceedingyearofassessment,subjecttocertainotherlimits t

CAPITAL

GAINSTAX

CapitalGainsTax(CGT),applicablesince1October2001,appliestoa residentsworldwideassetsandtoanon-residentsimmovablepropertyor assetsofapermanentestablishmentinSouthAfrica.

Disposals

CGTistriggeredondisposalofanasset. Importantdisposalsinclude: - abandonment,scrapping,loss,donation - vestingofaninterestinanassetofatrustinthebeneficiary - distributionofanassetbyacompanytoashareholder - granting,renewal,extensionorexcerciseofanoption Deemeddisposalsinclude: - terminationofSouthAfricanresidency - achangeintheuseofassets - thetransferofanassetbyapermanentestablishment - thereductionorwaiverofadebtbyacreditorwithoutfull consideration,subjecttocertainexclusions Disposalsexclude: - thetransferofanassetassecurityforadebtorthereleaseof suchsecurity - issueof,orgrantofanoptiontoacquire,ashare,debentureor unit trust - loansandthetransferorreleaseofassetsecuringdebt 22

Calculation of a Capital Gain/Loss

Acapitalgainorlossisthedifferencebetweentheproceedsandthe basecost.Acapitallossiscarriedforwardandisavailableforsetoffin thefollowingtaxyear

Base Cost

Expenditureincludedinthebasecost: - costofacquisition,transfer,stampduty,STTandsimilarcosts - remunerationofadvisors,consultantsandagents - costsofmovinganassetandimprovementcosts Expenditureexcludedfromthebasecost: - expensesdeductibleforincometaxpurposes - interestpaid,raisingfees(exceptinthecaseoflistedsharesand business assets) - expensesinitiallyrecordedandsubsequentlyrecovered Methodsforassetacquiredbefore1October2001: - Timeapportionmentbasecost Example: IfanassetcostR250000on1October1998andwassoldon 30September2010forR450000,asCGTwasimplementedon 1October2001,thebasecostis: Originalcostexpenditure Add: *Proceedsfromdisposal Less:Basecostexpenditure Timeapportionmentbasecost R250000 R50000* R450000 (R250000) R300000

} x 3/12

Note 1:Whendeterminingthenumberofyearstobeincludedinthetime apportionmentcalculation,apartoftheyearistreatedasafullyear. Note 2:Whereexpenditureinrespectofapre-valuationdateassetwasincurred onorafter1October2001andanallowancehasbeenallowedinrespectofthat asset,asecondtimeapportionmentformulaisapplied.

- Valuationasat1October2001 - 20%oftheproceeds Partdisposals: - Basecosttobeapportioned Thetotalamountreceivedoraccruedfromthedisposal Excluded: - amountsincludedingrossincomeforincometaxpurposes - amountsrepaidorrepayableorareductioninthesaleprice Specifictransactions: - connectedpersons-deemedtobeatmarketvalue - deceasedpersons-marketvalueasatdateofdeath - deceasedestates-thedisposalisdeemedtobeatthebasecost i.e.marketvalueatdateofdeath Max effective rate 10% 14% 20%

Proceeds

Inclusion Rates And Effective RatesInclusion rate Individualsandspecialtrusts 25% Companies 50% Trusts 50% UnitTrusts(CIS):theunitholderistaxable RetirementFunds:nottaxable 23

Exclusions and Rebates Annual exclusion NaturalpersonsandspecialtrustsR20000(2010:R17500). NaturalpersonsintheyearofdeathR200000(2010:R120000) Exclusions Aprimaryresidence,ownedbyanaturalpersonoraspecialtrust, usedfordomesticresidentialpurposes,wheretheproceedsdonot exceedR2milllion.WheretheproceedsexceedR2million,the exclusionisR1,5million(2006:R1million)ofthecalculatedcapital gain. Personaluseassets,notusedforthecarryingonofatrade Lumpsumsfrominsuranceandretirementbenefits.Thisexclusion doesnotapplytosecond-handpolicies Smallbusinessassetsoraninterestinasmallbusiness,limitedto R900000(2010:R750000)ifcertainrequirementsaremet,including: - thegrossassetvalueofthebusinessislessthanR5million -thenaturalpersonwasasoleproprietor,partneroratleast10% shareholderforatleastfiveyears,isatleast55yearsold,or suffersfromill-health,isinfirmordeceased Compensation,prizesanddonationstocertainPBOs Assetsusedbyregisteredmicrobusinessesforbusinesspurposes Rollover Relief Gainisdisregardeduntilultimatedisposaloftheassetsorinthecaseofa replacementassetitisrecognisedoverafiveyearperiodcommencingwhen thereplacementassetisbroughtintouseunlessdisposedofearlier Certaininvoluntarydisposalsandthereplacementofqualifying business assets Transferofassetsbetweenspouses Shareblockconversionstosectionaltitle Transferofresidencefromaqualifyingcorporateentityortrustbetween 11February2009and31December2012.Iftransferoccurredafter 1October2010transferringentitytobeterminated Corporate Transactions IncometaxandCGTreliefexistsforcertaintransactions.Theseare: Assetforsharetransactions Amalgamationtransactions Intra-grouptransactions Unbundlingtransactions Liquidation,windinguporderegistrationtransactionswithinagroup. Valuations Valuationsshouldhavebeenobtainedonorbefore30September2004.For certaincategoriesofassetsthesevaluationsshouldhavebeenlodgedwiththe firsttaxreturnsubmittedafter30September2004,orsuchothertimeasthe Commissionermayallow,providedthevaluationwasinfactdonepriortothe requisitedate herethemarketvalueofanyintangibleassetexceedsR1million W herethemarketvalueofanyunlistedinvestmentexceedsR10million W herethemarketvalueofanyotherassetexceedsR10million W Non-resident Sellers of Immovable Property Asfrom1September2007,whereanon-residentdisposesofimmovable propertyinSouthAfricaforR2millionormore,thepurchaserwillbeobligedto withholdthefollowingtaxesfromtheproceeds: Sellersstatus Withholdingtax Naturalperson 5,0% Company 7,5% Trust 10,0% 24

PRE-PAID

EXPENDITURE

Expenditurepaidshouldbeapportioned,totheextentthatonlyexpenditure actuallyincurredinayearofassessmentisdeductible.Theremainderofthe pre-paidexpenditurewillbedeductibleinsubsequentyearsofassessment. Thisdoesnotapply: wherethegoods,servicesorbenefits,inrespectofwhichthe expenditurewasincurred,aresuppliedorrenderedwithinsixmonths aftertheendoftheyearofassessment wherethetotalpre-paidexpendituredoesnotexceedR80000 (2008:R50000) toexpenditure,thetimingandaccrualofwhichisspecifically determined topre-paidexpenditurepayableintermsofalegislativeobligation.

RESEARCH

ANDDEVELOPMENT

Whereexpenditureisincurredinrespectofqualifyingscientificand technologicalresearchanddevelopmentonorafter2November2006,the followingdeductionswillbeallowed: 150%ofoperatingresearchanddevelopmentcostsinrespectofactivities undertakeninSouthAfricaforthepurposesofthediscoveryofnovel, practicalandnon-obviousinformation;ordevising,developingorcreating anyinvention,designorcomputerprogramasdefinedintheirapplicable acts,orknowledgeessentialtotheuseofsuchresearchproperty. Researchanddevelopmentcapitalcosts(includingthecostofany buildingorpartthereof,machinery,plant,implements,utensilorarticleor improvementstheretoofacapitalnature)ona50:30:20basis.

PATENT /

INTELLECTUALPROPERTY

Ataxpayermayclaimanallowanceforthecostofacquiringanyinvention, patent,design,copyright,otherpropertywhichisofasimilarnatureor knowledgeconnectedwiththeuseofsuchpatent,design,copyrightorother propertyortherighttohavesuchknowledgeimparted. WherethecostexceedsR5000,theallowanceislimitedto: 5%ofthecostinrespectofanyinvention,patent,copyrightorother propertyofasimilarnature;or 10%ofthecostofanydesignorotherpropertyofasimilarnature. Wheretheintangiblewasacquiredfromaconnectedpersontheallowanceis limitedtothecosttotheconnectedpersonlessallowancesclaimedbythe connectedpersonplusrecoupmentsandCGTincludedinthesellersincome. No allowance isallowedinrespectofanyexpenditureincurredbythe taxpayerinrespectoftheacquisitionofanytrademarkorpropertyofasimilar natureonorafter29October1999.

REINVESTMENT RELIEFTaxpayerscandefertaxablerecoupmentsandcapitalgainsonthesaleof businessassets(excludingbuildings)iftheyfullyreinvestthesaleproceedsin otherqualifyingassetswithinaperiodofthreeyears.Taxontherecoupment andcapitalgainuponthedisposaloftheoldassetisspreadoverthesame periodaswearandtearmaybeclaimedforthereplacementasset. 25

RESIDENCE BASEDResident means

TAXATION

Asfrom1January2001,residentsofSouthAfricaaretaxableontheir worldwideincome. AnaturalpersonwhoisordinarilyresidentinSouthAfrica;or Asfrom1March2005,anaturalpersonwhoisphysicallypresentin South fricaforatleast91daysinthecurrentandeachofthe A precedingfivetax earsandatleast915daysduringthefivepreceding y taxyears;or Acompanyortrustthatisincorporated,established,formedorwhich hasitsplaceofeffectivemanagementinSouthAfrica. Anaturalperson,whowaspreviouslyregardedasadeemedresident,if physicallyabsentfromSouthAfricaforacontinuousperiodofatleast 330daysfromthedateofdeparture Apersonwhoisdeemedtobeexclusivelyaresidentofanothercountry forthepurposesoftheapplicationofanydoubletaxationagreement. RemunerationforservicesrenderedoutsideSouthAfricaduringthetax yearifsuchpersonwasoutsideSouthAfricaforperiodsinaggregateof atleast183days,ofwhich60dayswerecontinuous Non-SouthAfricanpensionandsocialsecuritypayments.

Resident excludes

Exemptions

Foreign DividendsForeigndividendsreceivedfromanon-residentcompany,includingdeemed dividends,aretaxable,exceptif: Theshareholderholdsatleast20%oftheequityandvotingrightsofthe distributingcompany ThedistributingcompanyislistedonboththeJSEandarecognised foreignexchange Thedistributingcompanyisacontrolledforeigncompany(CFC)and the ividendsdonotexceedamountsdeemedtobetheresident d shareholdersincomeundertheCFCrules ThedividendisdeclaredfromamountsalreadytaxableinSouthAfrica. Interestisdeductiblewhereitisincurredintheproductionofforeign dividendstotheextentthattheyareincludedingrossincome.Excess interestpaidmaybecarriedforwardtothenexttaxyear. Aresidentisentitledtoacreditforanywithholdingtaxpaidinrespectofa foreigndividendthatisincludedingrossincome.

Controlled Foreign CompaniesACFCisanon-residentcompanyinwhichresidents,otherthanaheadquartercompany,directlyorindirectlyownorcontrolmorethan50%ofthe participationorvotingrights.Aresident,aloneorwithconnected persons,holdingatleast10%,butnotmorethan20%oftheparticipation rights,mayelectthattheforeigncompanyisdeemedtobeaCFC. 26

Aresidentmustincludeinhisincome: ResidentsparticipationrightsinCFC NetincomeofCFCx TotalparticipationrightsintheCFC ThenetincomeofaCFCshouldbecalculatedaccordingtoSouth Africantaxprinciples.Ifthecalculationresultsinaloss,thedeductions arelimitedtoincomeandtheexcessiscarriedforward. Thenetincome(includingcapitalgains)oftheCFCthatisderivedfrom anactivebona fideforeignbusinessestablishmentsituatedoutside SouthAfrica(subjecttocertainexclusions) IncomeoftheCFCotherwisetaxedinSouthAfricaatnormalrates ForeigndividendsreceivedbytheCFCfromanotherCFCtotheextent thattheincomefromwhichthedividendisdeclaredhasalreadybeen includedintheresidentstaxableincomeundertheCFCrules Netincomeattributabletointerest,royaltiesorsimilarincomepayable totheCFCbyotherforeigncompaniesformingpartofthesamegroup ofcompanies.

Exemptions

Tax RebatesWherearesidenthastoincludeinhistaxableincomeanyforeign sourcedincomeorcapitalgain,proportionateamountofthenetincome ofaCFC,foreigndividends,orotheramountsattributedintermsofthe IncomeTaxAct,arebateinrespectofanyforeigntaxespaidorpayable inrespectofsuchamounttoaforeigngovernmentisallowed Therebateislimitedtotheforeigntaxpayableandmaynotexceed:

Taxableforeignincome TotalSouthAfricannormaltaxx Totaltaxableincome Iftheforeigntaxpaidexceedsthelimitsetoutabove,theexcessforeign taxmaybecarriedforwardforamaximumofsevenyears

General AlossincurredincarryingonabusinessoutsideSouthAfricamaynotbe setoffagainstincomeinSouthAfrica TheamountofforeigntaxpayablemustbetranslatedtoSouthAfrican currencyatthelastdayofthetaxyearbyapplyingtheaverageexchange rateforthattaxyear ForeignincomeisconvertedtoRandsbyapplyingthespotexchange rateatthedatetheincomeaccrues.Naturalpersonsandnon-trading trustsmayelecttoapplytheaverageexchangerateforthattaxyear Whereforeignincomemaynotberemittedbecauseofrestrictions imposedbythesourcecountry,suchincomeisincludedintheresidents grossincomeinthetaxyearduringwhichthatamountmayberemitted toSouthAfrica TaxwithheldinaforeigncountryinrespectofSouthAfricansourced incomeisrecognisedasadeductionagainstsuchincomeratherthanas arebateagainstSouthAfricantaxpayableonthatincome. 27

REGIONAL

HEADQUARTERCOMPANY

Asfromyearsofassessmentcommencingonorafter1January2011,anew headquartercompanyregimeprovidesthefollowingbenefits: itssubsidiariesarenottreatedascontrolledforeigncorporations dividendsarenotsubjecttoSTCortheproposeddividendwithholdingtax noapplicationofthincapitalisationrulesmerelybecauseoftheexistence ofback-to-backcrossborderloans;and exemptionfromthependingwithholdingtaxoninterestinrespectof back-to-backloans Aregionalinvestmentfundregimealsoappliesfromyearsofassessment commencingonorafter1January2011.Qualifyingforeigninvestorswillbe regardedaspassiveinvestorswithnoexposuretoSouthAfricantaxbecause oftheuseofaSouthAfricanportfoliomanager.

TAXATION OF

NON-RESIDENTS

Interest Allinterestreceivedbyoraccruedtonon-residentsisexemptfromtaxunless thatperson: atanytimeduringthatyearcarriedonbusinessthroughapermanent establishmentinSouthAfrica;or isanaturalpersonwhowasphysicallypresentinSouthAfricaformore than183daysinaggregateduringthatyear. Dividends Anewdividendstaxhasbeenintroducedwithaneffectivedatestilltobe announced.Thisdividendstaxwillbebornebytheshareholderatarateof 10%(subjecttoanyreductionintermsofdoubletaxationagreements). Royalties Subjecttothedoubletaxationagreements,royaltiespaidtonon-residentsare subjecttoafinalwithholdingtaxof12%. ResidentsrequireGovernmentandExchangeControlapprovalforroyalty paymentstoanon-resident. Other Income Non-residentswillcontinuetobetaxedonSouthAfricansourceanddeemed sourceincomeonly. Payment to Non-resident Entertainers Awithholdingtaxof15%ispayablebynon-residentsportspersonsand entertainersonincomeearnedinSouthAfrica.

WITHHOLDING TAX

ONINTEREST

Asfrom1January2013,interestaccruingtoanon-resident,excludinga controlledforeigncompany,willbesubjecttoa10%withholdingtaxon payment,exceptinterest: arisingonanygovernmentdebtinstrument arisingonanylisteddebtinstrument arisingonanydebtowedbyaBankorSARB arisingfromabillofexchangeorletterofcreditwheregoodsareimported intoSouthAfricaandwhereanauthoriseddealerhascertifiedsuchonthe instrument payabletoaheadquartercompany accruingtoaforeignnaturalpersonwhowasphysicallypresentinSouth Africaforaperiodexceeding183daysinaggregate,duringthatyear,or carriedonabusinessthroughapermanentestablishmentinSouthAfrica.

28

DOUBLE TAXATION AGREEMENTSANDWITHHOLDINGTAXESDoubleTaxationAgreementsprovideforreliefinrespectofroyaltiesandknow-how withholdingtaxes.

Royalties % Non-Treaty Countries Treaty CountriesAlgeria Australia Austria Belarus Belgium Botswana Brazil Bulgaria Canada Croatia Cyprus CzechRepublic Denmark Egypt Ethiopia Finland France Germany Ghana Greece Grenada* Hungary India Indonesia Iran Ireland Israel Italy Japan Korea Kuwait Lesotho Luxembourg Malawi Malaysia Malta 10 5 0 5/10 0 10 10/15 5 10 5 0 10 0 12 20 0 12 12 10 5/7 12 0 10 10 10 0 12 6 10 10 10 10 0 12 5 10 Mauritius Mexico Mozambique Namibia Netherlands NewZealand Nigeria Norway Oman Pakistan PeoplesRepublicofChina Poland Portugal Romania RussianFederation Rwanda SaudiArabia Seychelles SierraLeone* Singapore SlovakRepublic Spain Swaziland Sweden Switzerland Taiwan Tanzania Thailand Tunisia Turkey Uganda Ukraine UnitedKingdom USA Zambia Zimbabwe

Royalties %

120 10 5 10 0 10 7.5 0 8 10 7/10 10 10 12 0 10 10 0 12 5 10 5 10 12 0 10 10 12 10 10 10 10 0 0 12 12

*PartoftheDTAwiththeUnitedKingdom

Notes 1 Iftheroyaltyissubjecttotaxintherecipientscountryofresidencethereisno withholdingtax. 2 3 Theaboveratesareprovidedasaguideonly.AnumberoftheaboveDTAs provideforalternativerates,includingzero,tobeappliedinspecific circumstances.ToviewthecompleteDoubleTaxAgreementsreferto www.sars.gov.za. CurrentlySouthAfricahasnowithholdingtaxondividendsorinterest.A newdividendwithholdingtaxistoreplaceSTCwitheffectfrom1April2012. Awithholdingtaxoninterestpaidtonon-residentswillbeintroducedfrom 1January2013.

29

ROYALTIES TO NON-RESIDENTSAsfrom1January2009,nodeductionwillbeallowedinrespectofroyalty paymentsif: theintellectualpropertywasatanytimewhollyorpartlyownedbythe taxpayeroranotherSouthAfricanresident,or theintellectualpropertywasdevelopedbythetaxpayeroraconnected personwhoisaresident. Iftheroyaltyissubjecttoawithholdingtaxatarateofatleast10%thena deductionofonethirdoftheroyaltywillbeallowed.

VENTURE

CAPITALINVESTMENTS

Asfrom1July2009ataxpayerwillbeentitledtoadeductionof100%ofthe costofsharesissuedbyaventurecapitalcompanysubjecttothefollowing limitations: anaturalpersonmaydeductR750000inayearofassessmentanda totalofR2250000 alistedcompanyandanycompanyheld70%directlyorindirectlyby thatlistedcompanycandeductamaximumofthecostofupto40%of thetotalequityinterestintheventurecapitalcompany theventurecapitalcompanymustbeapprovedbySARSasaqualifying companyandfulfilanumberofpre-conditions.

LEARNERSHIP

ALLOWANCE

Employersareallowedtoclaimlearnershipallowancesinrespectofregistered learnershipsoverandabovethenormalremunerationdeduction.Foryearsof assessmentendingonorafter1January2010: Whereanemployerispartytoalearnership,thelearnershipallowance consistsoftwobasicthresholds,namelyarecurringannualcommence mentallowanceofR30000andacompletionallowanceclaimableatthe endofthelearnershipofR30000.Thecompletionallowanceisclaimable cumulativelyforeverycompletedyearwherethelearnershipexceeds24 months Forlearnerswithdisabilitiestherelevantallowancesareincreasedto R50000 Learnershipsoflessthan12fullmonthswillbeeligibleforapro-rata amountofthecommencementallowance(regardlessofthereasonthat thelearnershipfallsshortofthe12monthperiod).Ifalearnershipfalls overtwoyearsofassessment,thecommencementallowanceisallocated pro-ratabetweenbothyearsbasedonthecalendarmonthsapplicableto eachyearbymultiplyingthecommencementamountbythetotalcalendar monthsofthelearnershipover12.

DIRECTORS

PAYE

Directorsofprivatecompaniesandmembersofclosecorporationsare deemedtohavereceivedamonthlyremuneration,subjecttoPAYE, calculatedinaccordancewithaformula. Theformulacalculatedremunerationdoesnotapplytodirectorsofprivate companiesandmembersofclosecorporationswhoearnatleast75%of theirremunerationintheformoffixedmonthlypayments. 30

TAXATION OF

FARMINGINCOME

FarmingincomeissubjecttotheprovisionsoftheFirstScheduletothe IncomeTaxAct.

Summary Of The First Schedules Main Paragraphs25&9 67 8 11 12 13 Valuationoflivestockandproduce Electionofstandardvalues Ring-fencingoflivestockacquisitions Donationsandinspeciedividends Capitaldevelopmentexpenditure Forcedsalesanddroughtrelief provisions 1416 17 19 20 Plantationfarming Sugarcanedestroyedby fire Ratingformulaforfarmers (whoarenaturalpersons) Expropriationoffarming land

Rating Formula Applicable To Farmers

Becauseafarmersincomefluctuatesfromyeartoyear,afarmerwhoisa naturalpersonmayelecttobetaxedinaccordancewitharatingformula. Theformulaisbasedontheaveragetaxablefarmingincomeinthecurrent andprecedingfouryears.Shouldheelecttomakeuseofthisformula,it isbindinguponhiminfutureyearsandheisnotpermittedtomakeuseof theprovisionsrelatingtogovernmentlivestockreductionschemes,rating formulaforplantationfarmersandprovisionsrelatingtosugarcanefarmers. Forafarmercommencingfarmingoperationstheaveragetaxableincome fromfarminginthefirstyearofassessmentendingonorafter1January 2008willbetwo-thirdsofthetaxableincomeforthatperiod.

Capital Development Expenditure (Paragraph 12)

Thefollowingitemsofcapitalexpenditure,incurredduringayearof assessment,aredeductibleagainstfarmingincome: expenditurewhichisnotrestrictedtotaxableincomefromfarming: - eradicationofnoxiousweedsandinvasivealienvegetationand preventionofsoilerosion expenditurewhichisrestrictedtotaxableincomefromfarming: - dippingtanks,buildingofroadsandbridgesforfarmingoperations - dams,irrigationschemes,boreholes,pumpingplantsandfences - additions,erectionof,extensionsandimprovementstofarmbuildings notusedfordomesticpurposes - costsofestablishingtheareaforandtheplantingoftrees,shrubs and perennial plants - carryingofelectricpowerfrommainpowerlinestofarmmachinery andequipment. Theexcessexpenditureovertaxableincomefromfarmingiscarriedforward tothenextyearofassessment. Machinery,implements,utensilsandarticlesforfarmingpurposesarewritten offoverthreeyearsona50:30:20basis.Thisdoesnotapplytomotor vehiclesusedtoconveypassengers,caravans,aircraft(excludingcropsprayingaircraft)orofficefurnitureandequipment.Normalwearandtear maybeclaimedontheseitems.

Non-farming Income

Incomefromnon-farmingsourcesshouldbeshownseparately. Themostcommonexamplesofnon-farmingincomeare: interestreceived incomederivedbyafarmerfromcarryingonatradeotherthanfarming annuities rentalincomefromfarmland. 31

BOND / INSTALMENT SALE REPAYMENTSThefollowingtablereflectsrepaymentsoneveryR1000borrowed. Example:AbondofR80000at10,5%over20years R80000R1000x09,98=R798.40amonthovera20yearperiod. Rate07,0% 07,5% 08,0% 08,5% 09,0% 09,5% 10,0% 10,5% 11,0% 11,5% 12,0% 12,5% 13,0% 13,5% 14,0% 14,5% 15,0% 15,5% 16,0% 16,5%

10 Yrs 20 Yrs11,61 11,87 12,13 12,40 12,67 12,94 13,22 13,49 13,78 14,06 14,35 14,64 14,93 15,23 15,53 15,83 16,13 16,44 16,75 17,60 07,75 08,06 08,36 08,68 09,00 09,32 09,65 09,98 10,32 10,66 11,01 11,36 11,72 12,07 12,44 12,80 13,17 13,54 13,91 14,29

Mortgage Bonds

25 Yrs 30 Yrs07,07 07,39 07,72 08,05 08,39 08,74 09,09 09,44 09,80 10,16 10,53 10,90 11,28 11,66 12,04 12,42 12,81 13,20 13,59 13,98 06,65 06,99 07,34 07,69 08,05 08,41 08,78 09,15 09,52 09,90 10.29 10,67 11,06 11,45 11,85 12,25 12,64 13,05 13,45 13,85

36 Months

Short Term Financing48 Months23,95 24,18 24,41 24,65 24,89 25,12 25,36 25,60 25,85 26,09 26,33 26,58 26,83 27,08 27,33 27,58 27,83 28,08 28,34 28,60

60 Months19,08 20,04 20,28 20,52 20,76 21,00 21,25 21,49 21,74 21,99 22,24 22,50 22,75 23,01 23,27 23,53 23,79 24,05 24,32 24,58

30,88 31,11 31,34 31,57 31,80 32,03 32,27 32,50 32,74 32,98 33,21 33,45 33,69 33,94 34,18 34,42 34,67 34,91 35,16 35,40

OFFICIAL INTERESTRATESANDPENALTIESType Provisional tax Provisional tax Provisional tax Assessment Loanto employee VAT VAT Employees tax SkillsDevelopment Levy Reason 1stand2nd paymentlate 3rdpayment late Overpayment Latepayment Deemedfringe benefit Latepayment Refund Latepayment Latepayment Basis of charge 10%penaltyplusinterestchargeddailyfrom duedatetodateofpayment Interestchargeddailyfromeffectivedateto earlierofpaymentdateorassessmentdate. Effectivedateissixmonthsafteryear-end, exceptinthecaseofFebruaryyear-ends, wheretheeffectivedateis30September Crediteddailyfromeffectivedatetodateof refund Interestchargedoneachcompletedmonth fromfirstduedatetodateofpayment Officialrateforfringebenefitlessactual ratexloanxactualmonthsdividedby12 10%penaltyplusinterestattheprescribed rate Calculatedmonthly,starting21businessdays afterreceiptofreturntodateofpayment. Periodissuspendedwhenvendordenies SARSaccesstobooksifrequested 10%penaltyplusinterestchargeddailyfrom duedatetodateofpayment 10%penaltyplusinterestchargeddailyfrom duedatetodateofpayment

32

PRIME OVERDRAFTDate of change07December2007 11April2008 13June2008 12December2008 06February2009 25March2009

RATESDate of change04May2009 29May2009 14August2009 26March2010 10September2010 19November2010

Rate %14,50 15,00 15,50 15,00 14,00 13,00

Rate %12,00 11,00 10,50 10,00 09,50 09,00

TheabovedatesareapplicabletoStandardBank.Banksdonotalwaysadjust theirratesonthesameday.

INTEREST RATES

CHANGES

Prescribed rate - Late payment of assessed and provisional tax and underpayment of provisional tax Date of change Rate % 1August2009 11,5 1September2009 10,5 1July2010 9,5 1March2011 8,5 Allpaymentsarefirstsetoffagainstpenalties,theninterestandfinallytax. Prescribed rate - Late payment of VAT Date of change Rate % 1September2009 10,5 1July2010 9,5 1March2011 8,5 Allpaymentsarefirstsetoffagainstpenalties,theninterestandfinallytax. Prescribed rate - Refund of overpayment of provisional tax Date of change Rate % 1July2009 8,5 1August2009 7,5 1September2009 6,5 1July2010 5,5 1March2011 4,5 Interestonoverpaymentofprovisionaltaxisonlypayableiftaxableincome exceedsR50000(individualsandtrusts)R20000(companiesandclose corporations)ortherefundexceedsR10000,regardlessoftaxableincome. Prescribed rate - Refund of VAT after prescribed period Date of change Rate % 1September2009 10,5 1July2010 9,5 1March2011 8,5 Prescribed rate - Refund on successful objection, appeal or conceded appeal Date of change Rate % 1March2011 8,5 Official rate - Fringe benefits Date of change Rate % 1July2009 8,5 1September2009 8,0 1October2010 7,0 Asfrom1March2011theofficialrateisequaltotheSouthAfricanrepurchaserate plus100basispoints.

33

TRANSFERProperty value

DUTY

Payablebynaturalpersonsandlegalentities: Rates of tax R0-R600000 R600001-R1000000 R1000001-R1500000 R1500001andabove

On Immovable Property (on or after 23 February 2011)

0% 3%onthevalueaboveR600000 R12000plus5%onthevalueaboveR1000000 R37000plus8%onthevalueaboveR1500000

otransferdutyispayableifthetransactionissubjecttoVAT N Ifaregisteredvendorpurchasespropertyfromanon-vendor,theVAT notionalinputtaxcreditislimitedtotheVATfraction(14/114)ofthelower oftheselllingprice,openmarketvalue,currentmunicipalvalueortheVAT inclusivepurchaseprice(includingimprovements)paidbythenon-vendor seller. Anotionalinputtaxcreditisonlyclaimabletotheextenttowhichthe purchasepricehasbeenpaid Certainexemptionsapplytocorporaterestructuring Theacquisitionofacontingentrightinatrustthatholdsaresidential propertyorthesharesinacompanyorthemembersinterestinaclose corporation,whichownsresidentialproperty,comprisingmorethan50% ofitsCGTassets,issubjecttotransferdutyattheapplicablerate Liabilitiesoftheentityaretobedisregardedwhencalculatingthefair valueofthecontingentrightinthetrust,thesharesinthecompanyorthe membersinterestintheclosecorporation Residentialpropertyincludesdwellings,holidayhomes,apartmentsand similarabodes,improvedandunimproved,zonedforresidentialpurposes. Itexcludesastructureoffiveormoreunits,rentedbyfiveormore unconnectedpersons.Italsoexcludesfixedpropertyformingpartofthe enterpriseofaVATvendor Anypersonwhodoesoromitstodoanythingwiththeintenttoevade transferdutymaybechargedwithadditionaldutyuptotwicetheamount ofdutypayable.Suchapersonisguiltyofanoffenceandliableon convictiontoafineorimprisonmentforaperiodnotexceeding60months Notransferdutyispayableinrespectoftheacquisitionbyaqualifying naturalpersonofaprimaryresidencefromaqualifyingcorporateentity ortrustbetween11February2009and30September2010.From 1October2010to31December2012thisexemptionisextendedto includemulti-tieredstructures.Afterthetransferoftheresidence,allthe entitiesmustbewounduporterminated.

NATIONAL CREDIT

ACT

Themaximumlendingratesofinterestarecalculatedasfollows: Mortgageagreements {(Reporatex2.2)+5%}peryear Creditfacilities {(Reporatex2.2)+10%}peryear Unsecuredcredittransactions {(Reporatex2.2)+20%}peryear Shorttermcredittransactions 5%permonth Othercreditagreements {(Reporatex2.2)+10%}peryear Incidentalcreditagreements 2%permonth TheNationalCreditActdoesnotapplytolargeagreementsasdefined,orto creditagreementswheretheconsumerisajuristicpersonwithaturnoverabove adefinedthreshold,thestateoranorganofthestate,orwherethelenderisthe SouthAfricanReserveBankoraforeigner.

34

STAMP DUTYNostampdutyispayableonleasesofimmovablepropertyenteredintoafter 1April2009.

INDUSTRIAL POLICY

PROJECTS

Anadditionalinvestmentallowanceforanapprovedprojectisavailableto brownfieldprojectexpansionorupgradeoragreenfieldprojectinrespectof newandunusedmanufacturingitems.Theadditionalinvestmentallowance, subjecttolimitations,is55%ofthecostoftheassetsor35%ifnopreferred statusapplies.Thereisalsoanadditionalprojectrelatedtrainingallowance ofR36000peremployeelimitedtoR30millionorR20millionifnopreferred statusapplies.

SECURITIES

TRANSFERTAX

Asfrom1July2008securitiestransfertaxispayableatarateof0,25%of theconsideration,closingpriceormarketvalue(whicheverisgreater)onthe transfer,cancellationorredemptionofanylistedorunlistedshare,members interestinaclosecorporationorcessionofarighttoreceivedistributions fromacompanyorclosecorporation. Onlistedsecurities,thismustbepaidbythe14thofthemonthfollowing themonthduringwhichthetransferoccurred Onunlistedsecurities,thismustbepaidbytheendofthesecondmonth followingtheendofthemonthduringwhichthetransferoccurred. Ifnotpaidinfullwithintheprescribedperiodinterestwillbeimposedat theprescribedrateanda10%penaltywillbepayable Dutyof0,5%ispayableonthecreationorincreaseinauthorisedshare capitalintermsoftheCompaniesAct NoSTTispayableiftheconsideration,closingpriceormarketvalueis lessthanR40000.

CONNECTED PERSONSWhereadepreciableassetisacquiredbyataxpayeranditwasheldbya connectedpersonwithinaperiodoftwoyearsbeforethatacquisition,the purchasermayclaimcapitalallowancesonthelowerofthepurchaseprice orthefollowingdeemedcost: thenettaxvalueoftheassettotheseller,plus therecoupmentonthedisposalbytheseller,plus thetaxablecapitalgainonthedisposalbytheseller.

DEEMED CAPITAL DISPOSALOFSHARESAsfrom1October2007,theproceedsonthesaleofanequityshareor collectiveinvestmentschemeunitwillautomaticallybeofacapitalnatureif heldcontinuouslyforatleastthreeyearsexcept: ashareinashareblockcompany ashareinanon-residentcompany ahybridequityinstrument. Previouslythetaxpayercouldelectthattheproceedsonthesaleofalisted shareheldforatleastfiveyearsbetreatedascapital. 35

DONATIONS TAXDonationstaxispayableatarateof20%onthevalueofanyproperty disposedofgratuitouslybyaSouthAfricanresident(naturalperson, corporateentityortrust)excludingdonationsexemptfromthetax.Thetax ispayablewithinthreemonthsofthedonationtakingeffect.

Exempt donations include: DonationsbynaturalpersonsuptoR100000peryearafter 1March2007(2006:R50000) Donationsbycorporateentitiesnotconsideredtobepubliccompanies uptoR10000peryear Donationsbetweenspousesnotseparated Bonafidemaintenancepayments DonationstoPublicBenefitOrganisationsandqualifyingtraditional councilsandcommunities Donationswherethedoneewillnotbenefituntilthedeathofthedonor Donationsmadebycompanieswhicharerecognisedaspublic companiesfortaxpurposes Donationscancelledwithinsixmonthsoftheeffectivedate Propertydisposedofunderandinpursuanceofanytrust DonationofpropertyorarightinpropertysituatedoutsideSouthAfrica ifacquiredbythedonor: - beforebecomingresidentinSouthAfricaforthefirsttime,or - byinheritanceordonationfromanon-resident Donationsbetweencompaniesformingpartofthesamegroupof companies.

ESTATE

DUTY

Rates of Estate Duty Personsdeceasedpriorto1October2001-25% Personsdeceasedonorafter1October2001-20%

Exemptions from Estate Duty include: Personsdeceasedpriorto1March2006,thefirstR1500000 Personsdeceasedonorafter1March2006,thefirstR2500000 Personsdeceasedonorafter1March2007,thefirstR3500000 Anybequesttoasurvivingspouseorapublicbenefitorganisation Whereasurvivingspousediesonorafter1January2010,theunutilised portionoftheexemptionofthefirstdeceasedspousemaybecarried forwardtotheestateofthesurvivingspouse.

EXECUTORS REMUNERATIONAnexecutorisentitledtothefollowingremuneration: theremunerationfixedbydeceasedinthewill,or 3,5%ongrossassetsand6%onincomeaccruedandcollectedfrom date of death ExecutorsremunerationissubjecttoVATwheretheexecutorisregisteredas avendor. 36

VALUE-ADDED TAX

(VAT)

VATwasintroducedon30September1991at10%andincreasedto14%on 7April1993.TheVATsystemcomprisesthreetypesofsupplies: Standard-rated suppliessuppliesofgoodsandservicessubjecttothe VATrateinforceatthetimeofsupply Exempt suppliessuppliesofcertainservicesnotsubjecttoVAT. Vendorsmakingexemptsuppliesarenotentitledtoinputcredits Zero-rated suppliessuppliesofcertaingoodsorservicessubjectto VATatzeropercent.Thefollowingare,amongstothers,specificallyzero- rated:brownbread,maizemeal,samp,mealierice,driedmaize,dried beans,lentils,pilchards(excludingpetfoodorsardinessuppliedintins), milkpowder(unflavoured),dairypowderblend,rice,freshvegetables (excludingcanned,bottledanddehydrated),freshfruit,vegetableoilused forcooking(excludingoliveoil),milkincludinglong-lifemilk(excluding condensed,flavoured,sweetenedandevaporatedmilk),culturedmilk, brownwheatenflour,raweggs,podvegetables,diesel,petroland illuminatingparaffin.Exportsalesandservicesarezero-rated,subjectto specificrequirements.SuppliesfromSouthAfricatoanIndustrial DevelopmentZonewillbetreatedasexports. VATinputtaxcreditsmayingeneralnotbeclaimedinrespectof entertainmentandsedananddouble-cabtypemotorvehicles. Allfee-basedfinancialservicesaresubjecttoVATwiththeexceptionof: premiumspayableinrespectoflifepoliciesissuedintermsofthe InsuranceActandcontributionstopension,provident,retirement annuityandmedicalaidfunds;and buyingorsellingofderivativesorgrantingofanoption.

Registration RequirementsAsfrom1March2009avendorisrequiredtoregisterforVATifturnoverina 12monthperiodislikelytoexceedR1million(previouslyR300000).Where turnoverislessthanR1million,butexceedsR50000(2009:R20000)and R60000inthecaseofcommercialrentalestablishmentsina12monthperiod, avendorcanregistervoluntarily.AllvendorsthatderegisterfromtheVAT systeminlightoftheincreaseintheVATregistrationthresholdtoR1million willbeallowedtopaytheexitVAToveraperiodofsixmonths. AregisteredmicrobusinessmaynotberegisteredforVAT. WhereturnoverislessthanR1,5million(previouslyR1,2million)ina12month period,VATreturnsmayberenderedeveryfourmonths.Whereturnoveris lessthanR30millionina12monthperiod,VATreturnsmayberenderedevery twomonths.TurnoverinexcessofR30millionresultsinVATreturnshavingto berenderedeverymonth.Farmers,withaturnoveroflessthanR1,5million (previouslyR1,2million),mayrenderVATreturnseverysixmonths. NormallyavendoraccountsforVATonaninvoicebasis.However,where turnoverina12-monthperiodislikelytobelessthanR2,5million,onecan applytobeplacedonapaymentsbasisifthevendorisanaturalpersonoran unincorporatedbodyofpersonswhosemembersarenaturalpersons. AtaxinvoicemustreflectthepurchaserstradenameandVATregistration number,ifthevalueisinexcessofR3000. 37

EXCHANGE CONTROLForeign Capital Allowance

REGULATIONS

Individuals,olderthan18years,ingoodstandingwithSARS,caninvest R4millionpercalendaryear(priorto5November2010:R4millionperlifetime)abroad.Incomeaccruingthereonmayalsoberetainedabroad.

Single Discretionary Allowance

Individuals,olderthan18years,haveasinglediscretionaryallowanceof R1million(2010:R750000)percalendaryearformaintenance,gifts,travel andstudy.Individuals,youngerthan18years,haveatravelallowanceof R200000(2010:R160000)percalendaryear.

Miscellaneous Transfers

Application,supportedbythenecessarydocuments,canbemadeforthe remittanceofalimonyandchildsupport,legalfees,feesforexaminations heldinSouthAfrica,weddingexpensesandBarorBatMitzvahceremonies, seminarfees,subscriptionsandsportingevents,subjecttocertainmonetary limitations.

Specialised Medical/Dental Expenses Abroad Full-time Students

Nolimit,providedsupportedbyoriginaldocumentaryevidenceofexpenses. Travelandmaintenancecostsareincludedinthesinglediscretionary allowance.Tuitionandacademicfeesmaybepaiddirectlytotheinstitution concernedagainstoriginaldocumentaryevidence,withoutanylimit.

Philatelic and Numismatic Imports Directors Fees

Nolimitapplicable,excludingSouthAfricangoldcoinsmintedafter1961. Nolimitisapplicabletodirectorsfeespaidtonon-residentsincluding emigrants.Applicationstobesupportedbyacopyofthedirectorsresolution confirmingtheamountpaidtogetherwithproofofnon-residentstatus.

Guarantees Emigrants

Nolimitisapplicabletoguaranteesgivenbynon-residentsforfinancial assistancetoSouthAfricanresidentswhoarenotaffectedpersons. Wheretheforeigncapitalallowancehasnotbeenfullyutilised,emigrantsare permittedatop-upto: R8millionpercalenderyearperfamilyunit R4millionpercalenderyearpersingleemigrant Householdandpersonalandothereffects(excludingcoinswhicharelegal tenderinSouthAfrica)maybeexportedwithinanoverallinsuredvalueof R2millionperfamilyunitorsingleemigrant. Inaddition,theunutilisedportionofthesinglediscretionaryallowancemay beremitted60dayspriortodeparturebutnotafterdeparture.

Inheritances

Non-residentsareentitledtotransfertheirinheritance,irrespectiveofwhether thedeceasedwasresidentornon-residentinSouthAfrica.FormerSouth Africanresidentshavetocompleteemigrationformalitiestoqualify.

Remittable Income Blocked Assets

Theincomeearnedbyanemigrantonhisblockedassetsisfreelyremittable abroad,afterprovidingforincometax. Unlimitedblockedfundsmaybereleasedlocallyforanypurpose,exceptthe grantingofaloantoaSouthAfricanresident. 38

Local Visits by Emigrants

Thereisnolimitonthedailyutilisationofblockedfundsduringavisitbyan emigrantbutthesefundsmaynotbeloanedtoaSouthAfricanresident. Directreturnairflightsmaybepaidlocallyfromblockedfunds.

Restrictions on Local Financial Assistance

The3:1ratiorestrictiononlocalfinancialassistancehasbeenabolishedfor affectedpersonswheretheborrowingisforworkingcapital. Localfinancialassistancesubjecttothe1:1ratioisavailableto: Emigrantswhereblockedrandbalancesorblockedrandassetsareused ascollateral Non-residentsiftheborrowingisrequiredfortheacquisitionof residentialorcommercialpropertyinSouthAfricaand/orfinancial transactions Affectedpersonsiftheborrowingisrequiredfortheacquisitionof residentialpropertyinSouthAfricaorfinancialtransactions Non-residentwhollyownedsubsidiariesiftheborrowingisrequiredfor theacquisitionofresidentialpropertyinSouthAfricaorfinancial transactions.

Foreign Investment in South Africa

Non-residentsenjoyunrestrictedrightstoinvestingiltsandshareslistedon theJSEandexporttheproceedsonthesalethereof.Interestanddividends arealsofreelyremittable.Loansbynon-residentstoSouthAfricanindividuals/ entitiesrequirepriorExchangeControlapproval.

Outbound Investments by Companies

ThelimitthatcanbeapprovedbyAuthorisedDealersisR500million (2008:R50million).ExchangeControlapprovalwillhavetobeobtainedfor investmentsexceedingthislimit.

ENVIRONMENTAL

EXPENDITURE

Expenditureincurredbyataxpayertoconserveormaintainlandis deductibleifitiscarriedoutintermsofabiodiversitymanagementagreement withadurationofatleastfiveyearsandthelandusedbythetaxpayerinhis tradeconsistsof,includes,orisincloseproximitytothelandwhichissubject tothisagreement.Wheretheconservationormaintenanceoflandownedby thetaxpayeriscarriedoutintermsofadeclarationofatleast30years duration,theexpenditureincurredisdeemedtobeadonationtothe Governmentwhichqualifiesasadeductionundersection18A. Incertaincircumstanceswherethelandisdeclaredanationalparkornature reserveanannualdonationbasedon10%ofthelesserofcostormarket valueofthelandisdeemedtobemadetotheGovernmentandqualifiesfor asection18Adeductionintheyearthedeclarationismadeandineachof thesubsequentnineyears. Recoupmentsarisewherethetaxpayerbreachestheagreementorviolates thedeclaration.

MARRIED

INCOMMUNITYOFPROPERTY

Taxpayerswhoaremarriedincommunityofpropertyaretaxedonhalfof theirowninterest,dividend,rentalincomeandcapitalgainandhalfoftheir spousesinterest,dividend,rentalincomeandcapitalgain,nomatterin whosenametheassetisregistered(exceptforassetsexcludedfromthejoint estate).Allothertaxableincomeistaxedonlyinthehandsofthespousewho receivesthatincome.

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RECOMMENDED GUIDELINE FOR THERETENTIONOFDOCUMENTSANDRECORDSRetention periods commence from the date of the last entry in the particular record

Companies

R