Taxation Laws Second Amendment Act

8. Section 102 of the Income Tax Act, 1962, is hereby amended— (a) by the insertion after subsection (1) of the following subsection: "(1A) The Commissioner may refuse to authorise a refund under subsection (1), if that person— (a) has failed to furnish a return for any year of assessment as required by this Act, until that person has furnished such return as required; or (b) has failed to furnish the Commissioner in writing with particulars of 25 that person's banking account or account with a similar institution 30 to enable the Commissioner to transfer a refund, if any, to that account."; and (b) by the deletion in subsection (2) of paragraphs (c) and (d). Amendment of section 102A of Act 58 of 1962, as inserted by section 40 of Act 94 of 1983 and amended by section 28 of Act 36 of 1996 35

9. The Income Tax Act, 1962, is hereby amended by the substitution in section 102A for the words following paragraph (b) of the following words: "the amount of his or her liability for normal tax for the said year either exceeds or falls short of the aggregate of the amounts of employees tax deducted or withheld from the said remuneration under the provisions of the Fourth Schedule, such 40 excess shall not be recoverable by the Commissioner from the said person if the amount thereof is less than R25 or such other amount as the Commissioner may determine by notice in the Gazette, or such shortfall shall not be refundable by the Commissioner to the said person if the amount thereof is less than R2 or such other amount as the Commissioner may so determine.". 45 10 No. 30158 Act No. 9, 2007 GOVERNMENT GAZETTE, 8 AUGUST 2007 TAXATION LAWS SECOND AMENDMENT ACT, 2007 Amendment of section 1 of Act 91 of 1964, as amended by section 1 of Act 95 of 1965, section 1 of Act 57 of 1966, section 1 of Act 105 of 1969, section 1 of Act 98 of 1970, section 1 of Act 71 of 1975, section 1 of Act 112 of 1977, section 1 of Act 110 of 1979, sections 1 and 15 of Act 98 of 1980, section 1 of Act 89 of 1984, section 1 of Act 84 of 1987, section 30 of Act 60 of 1989, section 1 of Act 68 of 1989, section 1 of Act 59 of 1990, section 1 of Act 19 of 1994, section 34 of Act 34 of 1997, section 57 of Act 30 of 1998, section 46 of Act 53 of 1999, section 58 of Act 30 of 2000, section 60 of Act 59 of 2000, section 113 of Act 60 of 2001, section 131 of Act 45 of 2003, section 66 of Act 32 of 2004, section 85 of Act 31 of 2005 and section 7 of Act 21 of 2006 5 10

10. Section 1 of the Customs and Excise Act, 1964, is hereby amended by the substitution in subsection (2) for the words preceding paragraph (a) of the following words: "In this section, except in the definition of 'package', and in sections 4, 6, 7, 18, 38, 44, 64A, 87(2) and [106] 107, 'container' means transport equipment of tariff 15 heading 86.09—". Amendment of section 8 of Act 91 of 1964, as inserted by section 36 of Act 19 of 2001 and amended by section 117 of Act 60 of 2001 11. (1) The following section is hereby substituted for section 8 of the Customs and Excise Act, 1964: "Cargo Reports 20 8. £1} Notwithstanding the provisions of sections 7 and 12, the Commissioner may by rule prescribe requirements in respect of the report of cargo and may prescribe that— (a) any report including any manifest or other report listing and describing 25 cargo carried by or loaded or to be loaded on to any ship[, aircraft, railway train] or [other] vehicle arriving at or departing from any place in the Republic, as the case may be; or (b) any outturn report or other report concerning goods landed from or unpacked from or packed into or loaded on to or to be packed into or 30 to be loaded on to any such ship or [aircraft] vehicle, as the case may be; or (c) any outturn report or other report in respect of any imported goods received or unpacked while under the control of any person after landing thereof at any place [approved by the Commissioner] 35 licensed in terms of this Act, shall be in such form containing such particulars and shall be submitted to the Controller by such person in such circumstances and at such times as may be specified in such rule. (2) Where the Commissioner prescribes that any report must be 40 submitted prior to cargo for export being packed into or loaded on to a ship or vehicle, no cargo shall be so packed or loaded before— (a) such report is received by the Controller; and (b) release of the cargo has been granted as prescribed in the rules. (3) (a) Any such outturn report or other report shall reflect full particulars concerning any excess or deficiency in respect of any goods landed, received, unpacked, packed or loaded, as the case may be, according to any manifest or other report contemplated in subsection (1). (b) Where any imported goods reported in any manifest or other report are not landed or— (i) any such goods not reported are landed; or (ii) any container or package is landed with visible evidence of tampering 45 50 or any deficiency is suspected, any person completing any outturn report on landing of the goods shall 12 No. 30158 Act No. 9, 2007 GOVERNMENT GAZETTE, 8 AUGUST 2007 TAXATION LAWS SECOND AMENDMENT ACT, 2007 examine and report on such goods in the presence of the carrier or the agent of the carrier, as my be prescribed by rule. (4) (a) Any exporter who— (i) packs or loads cargo or causes cargo to be packed or loaded in contravention of subsection (2); or (ii) fails to report cargo or makes any false or misleading statement in connection with any report to which this section relates, shall be guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding live years or to both such fine and imprisonment. 10 (b) Such cargo shall be liable to forfeiture in accordance with the provisions of this Act.". (2) Subsection (1) shall come into operation on a date fixed by the President by proclamation in the Gazette. Amendment of section 49 of Act 91 of 1964, as substituted by section 55 of Act 53 15 of 1999 and amended by section 60 of Act 30 of 2000, section 127 of Act 60 of 2001, section 46 of Act 30 of 2002 and section 24 of Act 34 of 2004

12. Section 49 of the Customs and Excise Act, 1964, is hereby amended— (a) by the substitution in subsection (l)(a) for the words preceding subparagraph (i) of the following words: "Whenever any international agreement which binds the Republic as contemplated in section 231 of the Constitution of the Republic of South Africa, 1996 [(Act No. 108 of 1996)], is an agreement [with the government of any country or countries or group of countries]—"; and (b) by the addition of the following subsection: "(10) Notwithstanding anything to the contrary contained in this Act, the Commissioner may, for the purposes of administering any provision of any agreement relating to customs administration which is not enacted into law as contemplated in this section— (a) decide on or determine any matter, perform any duty or function, exercise any power or impose any condition in connection with a provision so administered; and (b) make rules concerning any matter contemplated in paragraph (a);". 20 25 30 Amendment of section 15 of Act 89 of 1991, as amended by paragraph 8 of 35 Government Notice 2695 of 8 November 1991, section 20 of Act 136 of 1992, section 31 of Act 27 of 1997, section 90 of Act 30 of 1998, section 46 of Act 9 of 2006 and section 37 of Act 21 of 2006 13. (1) Section 15 of the Value-Added Tax Act, 1991, is hereby amended by the substitution in subsection (2) for paragraph (a) of the following paragraph: 40 "(a) the vendor is— [i] a public authority!,]; (ii) any water board or any other institution which has powers similar to those of any such board listed in Part B of Schedule 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999), which would have complied with the definition of 'local authority' in section 1 prior to the deletion of that definition by section 40(1)(i) of the Small Business Amnesty and Taxation Laws Act, 2006 (Act No. 9 of 2006); 45 (iii) a regional electricity distributor established after 30 June 2005 that is— (aa) a public entity regulated under the Public Finance Management Act, 50 1999 (Act No. 1 of 1999); (bb) a wholly owned subsidiary or entity of that public entity if the operations of the subsidiary or entity are ancillary or complemen tary to the operations of that public entity; or 14 No. 30158 Act No. 9, 2007 GOVERNMENT GAZETTE. 8 AUGUST 2007 TAXATION LAWS SECOND AMENDMENT ACT, 2007 (cc) a company contemplated in paragraph (a) of the definition of 'company' in section 1 of the Income Tax Act, which is wholly owned by one or more municipalities; (iv) a 'municipal entity' as defined in section 1 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000), where that municipal entity supplies— (aa) electricity, gas or water; or (bb) the services consisting of the drainage, removal or disposal of sewage or garbage; (v) a municipality; or (vi) an association not for gain; or". 10 (2) Subsection (1) shall be deemed to have come into operation on 1 July 2006. Amendment of section 20 of Act 89 of 1991, as amended by paragraph 11 of Government Notice 2695 of 8 November 1991, section 25 of Act 136 of 1992, section 33 of Act 97 of 1993, section 35 of Act 27 of 1997, section 94 of Act 30 of 1998, section 15 91 of Act 53 of 1999, section 157 of Act 60 of 2001, section 175 of Act 45 of 2003, section 47 of Act 16 of 2004, section 104 of Act 32 of 2004 and section 38 of Act 21 of 2006

14. Section 20 of the Value-Added Tax Act, 1991, is hereby amended by the deletion in subsection (5) of the further proviso. 20 Amendment of section 32 of Act 89 of 1991, as amended by section 38 of Act 27 of 1997, section 97 of Act 30 of 1998, section 95 of Act 53 of 1999, section 159 of Act 60 of 2001 and section 182 of Act 45 of 2003

15. Section 32 of the Value-Added Tax Act, 1991, is hereby amended— (a) by the addition to subsection (1)(a) of the following subparagraph: 25 "(vi) refusing to remit, in whole or in part, any interest or penalty in terms of section 39(7); or"; and (b) by the substitution for subsections (4) and (5), respectively, of the following subsections: "(4) The Commissioner may on receipt of a notice of objection to a 30 decision, direction, supplementary direction or an assessment alter the decision, direction, supplementary direction or assessment or may disallow the objection and must send the [taxpayer] person notice of such alteration or disallowance, and record any alteration or disallow ance made in the decision, direction, supplementary direction or 35 assessment. (5) Where no objection is lodged against any decision, direction, supplementary direction or assessment by the Commissioner as contem plated in subsection (1), or where any objection has been [disallowed] allowed in full or withdrawn [or any decision has been altered or any 40 assessment has been altered, as the case may be], such decision, direction, supplementary direction, assessment or altered decision, direction, supplementary direction or [such assessment or altered] assessment, as the case may be, is final and conclusive.". Amendment of section 41 of Act 89 of 1991, as amended by section 32 of Act 136 of 45 1992, section 36 of Act 97 of 1993, section 41 of Act 27 of 1997, section 98 of Act 30 of 1998, section 167 of Act 60 of 2001, section 40 of Act 32 of 2005 and section 39 of Act 21 of 2006 16. (1) Section 41 of the Value-Added Tax Act, 1991, is hereby amended by the addition of the following further proviso: 50 ": Provided further that paragraphs (a), (b) and (c) shall not apply to— (i) a written decision or a general written ruling issued by the Commissioner prior to 1 January 2007 in respect of supplies which are or will be made or goods imported on or after 1 January 2007, except to the extent that the 16 No. 30158 Act No. 9, 2007 GOVERNMENT GAZETTE, 8 AUGUST 2007 TAXATION LAWS SECOND AMENDMENT ACT, 2007 Commissioner prescribes in writing that the written decision or the general written ruling has binding effect on or after that date; or (ii) a written decision or a general written ruling issued by the Commissioner on or after 1 January 2007.". (2) Subsection (1) shall be deemed to have come into operation on 1 January 2007. 5 Insertion of section 41B of Act 89 of 1991 17. (1) The following section is hereby inserted in the Value-Added Tax Act, 1991, after section 41 A: "VAT class ruling and VAT ruling 41B. (I) The Commissioner may issue a VAT class ruling or a VAT ruling 10 and in applying the provisions relating to Part IA of Chapter III of the Income Tax Act, a VAT class ruling or a VAT ruling must be dealt with as if it were a binding class ruling or a binding private ruling, respectively: Provided that— (i) the provisions of sections 76E (other than subsection 76E(2)(m)) and 15 76F of the Income Tax Act shall not apply to any VAT class ruling or VAT ruling; (ii) an application for a VAT class ruling or a VAT ruling in terms of this section shall not be accepted by the Commissioner if the application— (aa) is for an advanced tax ruling that qualifies for acceptance in 20 terms of section 41 A; and falls within a category of rulings prescribed by the Minister by regulation for which applications for rulings in terms of this section may not be accepted. (bb) (2) For the purposes of this section— 'VAT class ruling' means a written statement issued by the Commissioner to a class of vendors or persons regarding the interpretation or application of this Act; 'VAT ruling' means a written statement issued by the Commissioner to a person regarding the interpretation or application of this Act. (3) Notwithstanding Part IA of Chapter III of the Income Tax Act, the Commissioner may not publish a VAT class ruling or a VAT ruling that is the same as a VAT class ruling, a VAT ruling or a binding general ruling already published.". 25 30 (2) Subsection (1) shall be deemed to have come into operation on 1 January 2007. 35 Amendment of section 55 of Act 89 of 1991, as amended by section 35 of Act 136 of 1992, section 38 of Act 97 of 1993, section 102 of Act 30 of 1998 and section 17 of Act 10 of 2006

18. Section 55 of the Value-Added Tax Act, 1991, is hereby amended by the substitution in subsection (4) for paragraph (a) of the following paragraph: 40 "(a) The Commissioner may, subject to such conditions as [he] the Commis sioner may determine, authorise the retention of the information contained in any records or documents referred to in subsection (3) (other than ledgers, cash books[,] and journals [and paid cheques]) in a form, including any electronic form, acceptable to [him] the Commissioner, in lieu of the retention of the originals 45 of such records or documents.". 18 No. 30158 Act No. 9, 2007 GOVERNMENT GAZETTE, 8 AUGUST 2007 TAXATION LAWS SECOND AMENDMENT ACT, 2007 Amendment of section 16 of Act 38 of 1996, as amended by section 59 of Act 27 of 1997, section 69 of Act 59 of 2000 19. (1) Section 16 of the Tax on Retirement Funds Act, 1996, is hereby amended— (a) by the insertion after paragraph (f) of the following paragraph: "(fA) the settlement of disputes;"; and (b) by the insertion after paragraph (v) of the following paragraph: 5 "(vA) the settlement of any dispute;". (2) Subsection (1) shall be deemed to have come into operation on 1 March 2007. Insertion of section 11A in Act 9 of 2006 20. (1) The following section is hereby inserted in the Small Business Tax Amnesty 10 and Amendment of Taxation Laws Act, 2006 after section 11: "Reduced assessments and objections 11 A. No reduced assessment may be issued in terms of section 79Aof the Income Tax Act and no objection may be made in terms of section 81 of that Act in respect of the 2006 year of assessment or any preceding year of 15 assessment based on any relief granted in terms of section 8.". (2) Subsection (1) shall be deemed to have come into operation on 1 August 2006. Amendment of section 2A of Act 10 of 2006, as inserted by section 45 of Act 21 of 2006 21. (1) Section 2A of the Second Small Business Tax Amnesty and Amendment of 20 Taxation Laws Act, 2006, is hereby amended by the substitution for subsection (2) of the following subsection: "(2) The registered auditor must [posses] possess written proof of an appointment to assist or advise an entity in connection with an application or prospective application for amnesty in terms of the Small Business Tax Amnesty 25 and Amendment of Taxation Laws Act, 2006 (Act No. 9 of 2006), to qualify for the exemption provided for in subsection (1).". (2) Subsection (1) shall be deemed to have come into operation on 1 August 2006. Amendment of long title to Act 21 of 2006 22. (1) The long title to the Revenue Laws Second Amendment Act, 2006, is hereby 30 amended by the deletion of the following expression: "to amend the Second Revenue Laws Amendment Act, 2004, so as to delete the Advance Tax Ruling provisions from the Value-Added Tax Act; to amend the Taxation Laws Second Amendment Act, 2005, so as to delete the Advance Tax Ruling provisions from the Value-Added Tax Act;". 35 (2) Subsection (1) shall be deemed to have come into operation on 7 February 2007. Amendment of section 2 of Act 21 of 2006 23. (1) Section 2 of the Revenue Laws Second Amendment Act, 2006, is hereby amended— (a) by the substitution for subsection (2) of the following subsection: 40 "(2) Subsection (1), in so far as it relates to section 80B, shall come into operation when Part IIA of Chapter III of the Income Tax Act, 1962, comes into operation."; and (b) by the addition of the following subsection: "(3) Subsection (1), in so far as it relates to section 80S, shall come 45 into operation when Part IIB of Chapter III of the Income Tax Act, 1962, comes into operation.". (2) Subsection (1) shall be deemed to have come into operation on 7 February 2007. 20 No. 30158 Act No. 9, 2007 GOVERNMENT GAZETTE, 8 AUGUST 2007 TAXATION LAWS SECOND AMENDMENT ACT, 2007 Repeal of section 13 of Act 21 of 2006

24. Section 13 of the Revenue Laws Second Amendment Act, 2006, is hereby repealed. Amendment of section 28 of Act 21 of 2006

25. Section 28 of the Revenue Laws Second Amendment Act, 2006, is hereby 5 amended by the substitution for subsection (1) of the following subsection: "(1) The following section is hereby inserted in the Customs and Excise Act, 1964, after section 64L: 'Licensing of transit sheds 64M. (1) (a) Every transit shed shall be licensed in accordance with the 10 provisions of section 60, this section, any applicable note in Schedule No. 8 and any rule relating to such licence. (b) Application for such a licence shall be made on the prescribed form and shall be supported by the documents and information specified in such form and as the Commissioner may require from each applicant. (c) Before any licence is issued the applicant for a licence must furnish security as contemplated in section 60(1)(c): Provided that the Commis sioner may on good cause shown, to the extent considered reasonable in each case, reduce the amount of such security or exempt any person from furnishing security. (d) Before commencing operations, or from a date thereafter specified by the Commissioner by rule, every transit shed operator shall register for the purposes of electronic communication as a user and enter into a user agreement in terms of section 101A and the rules made thereunder. 15 20 (2) (a) (i) Except if determined otherwise by rule, break bulk goods for export must be delivered to and exported from a transit shed or a combination terminal. 25 (ii) The transit shed operator shall— (aa) be responsible for ensuring that goods for export are delivered to a combination terminal or are loaded on a ship or vehicle for export; and (bb) in addition to any liability for duty incurred by any person under any other provision of this Act, be liable for the duty on any goods received for export and such liability shall cease when it is proved that the goods have been delivered to a combination terminal or have been loaded on a ship or vehicle as contemplated in subparagraph (aa). (iii) The transit shed operator shall produce such proof to the Controller as may be prescribed by rule that the goods have been delivered to a combination terminal or have been loaded on a ship or vehicle for export, (iv) Goods received in a transit shed may not be opened or withdrawn therefrom without the permission of the Controller and in compliance with such procedures as may be prescribed by rule. (v) The receipt, storage and handling of goods in a transit shed shall be in accordance with the requirements that may be prescribed by rule. (b) Except where goods have been entered for home consumption and released thereafter or any other procedure is authorised by rule, the provisions of section 18 shall apply mutatis mutandis to any movement of any imported goods from a transit shed. (3) The Controller may require any break bulk goods to be detained in a transit shed for examination of the package or its contents, including by non-intrusive inspection methods contemplated in section 4(8A). (4) (a) The Commissioner may refuse an application for a transit shed 30 35 40 45 50 licence or cancel or suspend such a licence. 22 No. 30158 Act No. 9, 2007 GOVERNMENT GAZETTE, 8 AUGUST 2007 TAXATION LAWS SECOND AMENDMENT ACT, 2007 (b) The provisions of section 60(2) shall apply mutatis mutandis for the purposes of paragraph (a). (5) The Commissioner may prescribe by rule— (a) the security requirements regarding the premises, equipment of the transit shed and control measures to be observed in a transit shed; (b) any procedure or obligation in connection with packages received which are— in excess of manifested quantities; (i) (ii) unmanifested excess consolidated packings or packages; (iii) manifested but not received; 10 (c) reports to be made and procedures to be followed relating to packages received with signs of damage, tampering or other discrepancy; (d) records to be kept in respect of the storage and movement of goods and any other activity in the operation of the transit shed; (e) all matters that are required or permitted in terms of this section to be if) prescribed by rule; and any other matter which is necessary to prescribe and useful to achieve the efficient and effective administration of the activities of a transit shed.' ". Repeal of section 37 of Act 21 of 2006

26. Section 37 of the Revenue Laws Second Amendment Act, 2006, is hereby repealed. Amendment of section 39 of Act 21 of 2006

27. Section 39 of the Revenue Laws Second Amendment Act, 2006, is hereby amended by the deletion in subsection (1) of paragraph (b). Repeal of section 40 of Act 21 of 2006 20 25

28. Section 40 of the Revenue Laws Second Amendment Act, 2006, is hereby repealed. Amendment of section 43 of Act 21 of 2006

29. Section 43 of the Revenue Laws Second Amendment Act, 2006, is hereby 30 amended by the substitution for subsection (2) of the following subsection: "(2) Subsection (1) shall come into operation on the date Part A of Chapter [X] XA comes into operation.". Short title and commencement 30. (1) This Act is called the Taxation Laws Second Amendment Act, 2007. (2) Save in so far as is otherwise provided for in this Act or the context indicates otherwise, the amendments effected to the Income Tax Act, 1962, by this Act shall for the purposes of assessments in respect of normal tax under the Income Tax Act, 1962, be deemed to have come into operation as from the commencement of years of assessment ending on or after 1 January 2008. 35 40