Income Tax Act, 1962 (Act No. 58 of 1962) > Chapter II : The Taxes > Part I : Normal Tax > 12F. Deduction in respect of airport and port assets

[Section 12F heading substituted by section 26(1)(a) of the Revenue Laws Amendment Act, 2007 (Act No. 35 of 2007) - effective 1 January 2008]

(1) For the purposes of this section—

"airport asset"

means any aircraft hangar, apron, runway or taxiway on any designated airport, and includes any earthworks or supporting structures forming part of such aircraft hangar, apron, runway or taxiway and any improvements to such aircraft hangar, apron, runway or taxiway; and

[Definition substituted by section 22(a) of the Taxation Laws Amendment Act, 2009 (Act No. 17 of 2009)]

"designated airport"

means an airport approved by the Minister, in consultation with the Minister of Transport, as a designated airport by notice in the Gazette for purposes of this section; and

"effective date"

[Definition deleted by section 26(1)(c) of the Revenue Laws Amendment Act, 2007 (Act No. 35 of 2007) - effective 1 January 2008]

"port asset"

means any port terminal, breakwater, sand trap, berth, quay wall, bollard, graving dock, slipway, single point mooring, dolos, fairway, surfacing, wharf, seawall, channel, basin, sand bypass, road, bridge, jetty or off-dock container depot, and includes any earthworks or supporting structures forming part of such terminal, breakwater, sand trap, berth, quay wall, bollard, graving dock, slipway, single point mooring, dolos, fairway, surfacing, wharf, seawall, channel, basin, sand bypass, road, bridge, jetty or depot and any improvements thereto.

[Definition substituted by section 22(b) of the Taxation Laws Amendment Act, 2009 (Act No. 17 of 2009)]

(2)	In respect of any new and unused airport asset or port asset which—

(a)	is brought into use for the first time by such taxpayer; and

(b)	is used directly by such taxpayer solely for the purposes of carrying on the taxpayer’s business as airport, terminal or transport operator or port authority,

there shall be allowed to be deducted an allowance, in respect of an asset brought into use by the taxpayer on or before 28 February 2022, in the carrying on of a trade, in respect of the cost actually incurred by the taxpayer in respect of the acquisition (including the construction, erection or installation) of such asset to the extent that such asset is used in the production of the taxpayer’s income.

[Words following paragraph (b) of section 12F(2)(b) substituted by section 13 of the Taxation Laws Amendment Act, 2021 (Act No. 20 of 2021), Notice No. 770, GG45787, dated 19 January 2022]

(2A)

For the purposes of this section where a taxpayer completes improvements as contemplated in section 12N, the expenditure incurred by the taxpayer to complete that improvement shall be deemed to be the cost actually incurred by that taxpayer in respect of the acquisition of a new and unused airport asset or port asset contemplated in subsection (2).

[Section 12F(2A) inserted by section 24(1) of the Taxation Laws Amendment Act, 2010 (Act No. 7 of 2010)]

(3)	The allowance contemplated in subsection (2) in respect of an asset shall, in respect of any one year of assessment, be five per cent of the cost incurred in respect of that asset.

[Section 12F(3) substituted by section 26(1)(e) of the Revenue Laws Amendment Act, 2007 (Act No. 35 of 2007) - effective 1 January 2008]

(3A)

Where any asset in respect of which any deduction is claimed in terms of this section was during any previous year of assessment used by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year, any deduction which could have been allowed in terms of this section during such year or any subsequent year in which such asset was used by the taxpayer shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.

[Section 12F(3A) substituted by section 24 of the Revenue Laws Amendment Act, 2008 (Act No. 60 of 2008)]

(4)

For the purposes of this section the cost to a taxpayer of any asset shall be deemed to be the lesser of the actual cost to the taxpayer or the cost which a person would, if he had acquired the said asset under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition of the said asset was in fact concluded, have incurred in respect of the direct cost of acquisition of the asset, including the direct cost of the installation or erection thereof or, where the asset has been acquired to replace an asset which has been damaged or destroyed, such cost less any amount which has been recovered or recouped in respect of the damaged or destroyed asset and has been excluded from the taxpayer’s income in terms of section 8(4)(e), whether in the current or any previous year of assessment.

(5)	No deduction shall be allowed under this section in respect of any asset which has been disposed of by the taxpayer during any previous year of assessment.

[Section 12F(5) substituted by section 26(1)(f) of the Revenue Laws Amendment Act, 2007 (Act No. 35 of 2007) - effective 1 January 2008]

(6)	The deductions which may be allowed or deemed to have been allowed in terms of this section and any other provision of this Act in respect of the cost of any asset shall not in the aggregate exceed the amount of such cost.

[Section 12F(6) substituted by section 26(1)(f) of the Revenue Laws Amendment Act, 2007 (Act No. 35 of 2007) - effective 1 January 2008]

[Section 12F inserted by section 12 of the Revenue Laws Amendment Act, 2001 (Act No. 19 of 2001)]