Income Tax Act, 1962 (Act No. 58 of 1962)Chapter II : The TaxesPart VIII : Dividends Tax64EB. Deemed beneficial owners of dividends |
(1) For the purposes of this Part, where—
| (a) | a person contemplated in section 64F(1) acquires the right to a dividend in respect of a share, including a dividend that has not yet been declared or has not yet accrued, by way of cession; and |
| (b) | an amount in respect of that dividend is received by or accrues to the person who acquired that right, |
any person ceding that right is deemed to be the beneficial owner of that dividend:
[Words preceding proviso of section 64EB(1) substituted by section 37(1)(a) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - comes into operation on 1 January 2021 and applies in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement (section 37(2)]
Provided that this subsection does not apply to any cession in respect of a share if the person to whom those rights are ceded holds all the rights attaching to the share after the cession.
[Words preceding proviso of section 64EB(1) substituted by section 61(1)(a) of the Taxation Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019 - effective 1 January 2019 (section 61(2)]
(2) For the purposes of this Part, where—
(a) a person that is—
| (i) | a company which is a resident; |
| (ii) | the government of the Republic in the national, provincial or local sphere; |
[Section 64EB(2)(a)(ii) substituted by section 69(1)(a) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014)]
| (iii) | a public benefit organisation approved by the Commissioner in terms of section 30(3); |
| (iv) | a trust contemplated in section 37A; |
| (v) | an institution, board or body contemplated in section 10(1)(cA); |
| (vi) | a fund contemplated in section 10(1)(d)(i) or (ii); |
| (vii) | a person contemplated in section 10(1)(t); |
| (viii) | [Section 64EB(2)(a)(viii) deleted by section 74 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015)] |
| (ix) | [Section 64EB(2)(a)(ix) deleted by section 74 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015)] |
| (x) | a portfolio of a collective investment scheme in securities; |
| (xi) | any person to the extent that the dividend constitutes income of that person; |
| (xii) | [Section 64EB(2)(a)(xii) deleted by section 74 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015)] |
| (xiii) | any fidelity or indemnity fund contemplated in section 10(1)(d)(iii); or |
[Section 64EB(2)(a)(xiii) substituted by section 69(1)(b) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014)]
| (xiv) | a small business funding entity as contemplated in section 10(1)(cQ) |
[Section 64EB(2)(a)(xiv) inserted by section 69(1)(b) of the Taxation Laws Amendment Act, 2014 (Act No. 43 of 2014)]
borrows from another person or acquires a listed share in terms of a collateral arrangement entered into with another person; and
[Words following section 64EB (2)(xiv) substituted by section 37(1)(b) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - comes into operation on 1 January 2021 and applies in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement (section 37(2)]
| (b) | a dividend in respect of that share or any amount determined with reference to a dividend in respect of that share is received by or accrues to that person, |
[Section 64EB(2)(b) substituted by section 37(1)(c) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - comes into operation on 1 January 2021 and applies in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement (section 37(2)]
any amount paid by that person to that other person not exceeding that dividend or amount determined with reference to a dividend in respect of that share is deemed to be a dividend paid by that person for the benefit of that other person.
[Words following paragraph (b) substituted by section 37(1)(d) of the Taxation Laws Amendment Act, 2020 (Act No. 23 of 2020), GG44083, dated 20 January 2021 - comes into operation on 1 January 2021 and applies in respect of amounts paid on or after that date in respect of shares that are borrowed or acquired in terms of a collateral arrangement (section 37(2))]
(3) For the purposes of this Part, where—
| (a) | a person that is contemplated in section 64F(1) acquires a share in a listed company (or any right in respect of that share) from another person; |
[Section 64EB(3)(a) substituted by section 61(1)(e) of the Taxation Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019 - effective 1 January 2019 (section 61(2)]
| (b) | that acquisition is part of a resale agreement between the person acquiring that share and that other person or to any other company forming part of the same group of companies as that other person; |
| (c) | a dividend in respect of that share is received by or accrues to that person, |
[Section 64EB(3)(c) inserted by section 61(1)(f) of the Taxation Laws Amendment Act, 2018 (Act No. 23 of 2018), GG 42172, dated 17 January 2019 - effective 1 January 2019 (section 61(2)]
that other person or other company is deemed to be the beneficial owner of that dividend.
| (4) | For the purposes of this section, "resale agreement" means the acquisition of a share by any person subject to an agreement in terms of which that person undertakes to dispose of that share or any other share of the same kind and of the same or equivalent quality at a future date. |