Income Tax (Amendment) Act, 2002

1. (1) This Act may be cited as the Income Tax (Amendment) Shon title Act, 2002, fuid shall be read as one with the Income Tax Act, in and com· mencement this Act referred to as the principal Act. Cap. 323 ,., · (2) TirisAct shall come into operation.on the I st April, 2002, and subject to any provisions to the contrary, shall have effect in relation to the charge of tax for the charge year which ends on 31st March, 2003, and in relation to each subsequent charge year.

2. Section two of the principal Act is amended in subsection Amendment of section 2 (1)-- ( a) b y the deletion of the definition of " Taxpayer Identilication Number" and the substitution therefor of the following definition: " Taxpayer Identification Number" means the national registration card number or such number as may be designated and issued by the Commissioner General to a taxpayer; (b) by the insertion in the appropriate places of the fo)lowing new definitions: " approved share option scheme" means a scheme ·· that has been approved, by the Commissioner- · General, under the· Eighth Schedule; and ,i "share option scheme" means a scheme that provides an option to an employee to acquire shares in the company.that employs·that employee orntherwisc. _ _ ;;. · S!'Ction·iwentfone of the principalActis ame�ded insubs.."ction \-,Amendment (5) by· the deletion of the words " three million kwacha " and the of section 21 s�bstiiut:ion iherefor of the words ;, five million �:!cha ,; . '. , . . • . , Si�gle copies of this Act may b_e obtained from the.Gov��nt Printer; .. . P.O. Bi:ix 30/36, 10100 Lusaka. Price KJOOO}Xl°eaci, · ,' �: .. : ... ·;,. ;;: .", .-. . • _;},Jti'/;:;� .. �-�•;,'-:1th: m��· ' -=�1�'l.'i.",1f• .-::�;�:;::\ ... 'll?':-�.c."; �:!:-�ft'l'i(:,,:.;.�i'l":�--:":.'.'.'<;'/,,·��;t)�,;.t�·�1 ·�:•;"'-_ -.,-:::r�---::�-:·:•.t:-=; ,;; •/·�·-.. ,., ,"'1';"','��,,;�;;-·.r,v. :·•;'..;•;,�-[ 4Wf::.1",T."'.._,.f -;tO::j""t - :.. .--�-::�:- .,!· ::-::�:� ·.?.,.�:..:;� .-..-;:]'£' • .,...,_.:;_�: ... --: ... �::. :::."":/ �-.-:��;.: l.:�:iS��: J�i J}!tJ.1: :2.0 f::t:tf;;-r�-� _i� : � i�ft a� -.,:S;.�i� ;-;:._J�;-::,;.?;;:;; ? ;·;. �� i�1-:;n �· �;- \ ti��-. \ �kt��1-r;·{:::.� r, ;;,°:l'Y.i•tV-·· . . · · 58 No. 3· of 2002] Income Tax (Amendment) Amendment of section 29A

4. Section twenty-nine A of the principal Act is amended by the insertion after subsection (2) of the following new proviso: Provided that any foreign currency exchange gains or losses of a bank of a capital nature shall not be assessable or. deductible as the case may be in the charge year in which they are translated. :-,_'._)/: .. �-· .. , ' .,. )!•::· '. :.�.: ·,,, r, . .. ' ' .,. -� : .. ·:·--· . Amendment of 5ection 34A losertion of new section 37A Deduction for share option scheme , Repeal of section 43C Amendment of section 43D Amendment , of section 4:1 Amendment� Of section 46 ..· ... '... - -- -

5. Section .thirty-four A �f the principal Ac! is amended in subsection (2) by the insertion of the word " consecutive " immediately after the word" three ".· '

6. The principal Act is amended by the insertion immediately after section thirty-seven of the following new section: 37 A. A deduction shall be allowed in ascertaining the gains or profits of an employer for a charge year of any amount incurred by the employer in the establishment or in the administration ofan approved share option scheme for that charge year.

7. The principal Act is amended by the repeal of sectionforty­ three C.

8. Section forty-three D of the principal Act is amended- ( a) in.subsection (1) by the deletion of the words "handicapped person "and the substirution therefor of the words "person with disability "; and . (b) in subsection (2) by the deletion of the words" two hundred and forty thousand kwacha " and the substitution therefor of the words ,: five hunC!'ed ti1ous8.!1d kwacha·''.-

9. Section forty-four of the principal Act is amended by the . I ·: inserti6n after paragraph (h) of the following new paragraph: •I (i)any amount incurred by the employer in the establishment or · a.c!rninistration of n. share option scheme, except such . amounts as are allowed uncier section 1hiny-seve1t A. ' . .of the, principal A�t is �ended in '.

10. Section forcy,six ' . ' ·.,' . . subsection (2)-- ... -:;•_f· ' \,::• ':.·. ( a) \)Y the dcietioµ in paragr:i.ph (bj_ oft.fie word·" a..'ld·". aft�r .. . 'the semi:co!on; _,: ;, :.,.,.. '· � '. :": · •-- ' . ·-··(O) by the ddetion ill'.paragraph.(c)--of fue full 'stop :,fter :h,r . .. word'" year" and the subsututibn therefor of.a semi' . - - - · ,:'oion anci"iiie, word '' and '\ ai{c1 -· .·. ... . ·- . itli�;,�,;,��;�� � · ·. ·. ""'"'·"' �,-,��i�t:__i,�:-:-�.:..� ... ��r-��rt:-,;111;1,l •-e:w�.,,..i"�•��•t1i' "'.':�-"""�16 !!!!!!!!! �111111!!!!�-- �,.,, '.c-�.): ; �_;· .,., �1,,.:.--�1..•;•;�,:-i•·-:··· . ,.· . i r ·;f ,'" , , r // '/{; 1 . f! ,,_. •I I 'A,;.'/'. ' /\ � ' !.·· ., · ,. i�:Y(\\-j Jncome Tax (Amendment) [No. 3 of 2002 59 Amendmen_l .' of section 46A (c) by the insertion.immediately after paragraph.(cJ,.of the following new paragraph:' · (d) be designated in kwacha. ·

11. Section forty-six A of the principal Act is amended- ._i:.,., .r·, h ,·r1 , .. '· .y;. , .';'°, .:... , 1·.V.'·· � . :. :· ·}r .·,: .. ::. ,_· ' ' C. - ( aJ.in the proviso to subsection (1) by the deletion of the words '.'one million four hundred and forty thousand kwacha " and the substitution therefor of the 'Yords " one· mill\on eight hundred thousand kwacha "; and (b) in subsection (2)- sc::::- (i) by the deletion in paragraph (b) of the word " and" .- , after the semicolon; (ii) by the deletion in paragraph ( c) of the full stop after the word " year " and the substitution therefor of a semicolon and.the word " and"; and , (iii) the insertion immediately after paragraph ( c} of the following new paragraph: ( d) be designated in kwacha. ·12. Section fifty-three of the principal Act is amended by the insertion of the words " or electronically stored data " after the words " charge of documents", and immediately after the words " those documents". Amendment of section 53

13. Section fifty-six of the principal Act is amended by the deletion of subsection (1) and the substitution therefor of the following: Amendlllent of section 56 (1) Notwithstanding the provisions of subsection (3) of section fifty-five every return furnished under subsection ( l) of section fony-six by any person shall be accompanied by such accounts and other docwnents, in kwacha, as are necessary to suppon the return and shall be signed by the person furnishing the return.

14. Section fifty-eight of the principal Act is amended in paragraphs (a), (b), and (c), by the insenion of the ·words " or electronically stored data " after the words " other documents ".

15. Section si:x:ty-rhree of tlie principal Act is amended in the . proviso to subsection(!) : .. ( a)'by--t!ie.'deletion of th� full stop after the words " eigizry•' rwo A " and the substitution therefor of a seinii:olon a.iid the ward " or " and . :°roJby the insein�n-inim�diaieiy after paragraph (iv) -�f �e . ,.: . .foll_owh1g ne;" paragraph: ... > ··-·· - .,..,. . ., �. -- - ' .,.... . . . •' :-: ' ' ' ... ·.: -·· . ·· • .,1 ,'. Amendment of section 58 Amendment of section 63 ' . -· . :, 60 No. 3 of 2002] Income Tax (Amendment) Amendment of section 64 (v) interest oil Government Bonds from which tax in respect of that charge year has been deducted under section eighty-two A 16, Section sixty{our of the principal Act is amended- ( a) by the deletion of the. colon in paragraph (c) and the substitution therefor of a" semicolon " and the word " or"; and (b) by the insertion immediately after paragraph (c) of the following new paragraph: ( d) where the Commissioner General has reason to believe that the company is to be wound up or liquidated: Amendment of section 97AA •

17. Section ninety-seven AA of the principal Act is amended- (a) in subsection (4) by the deletion of paragraph (e) and the substitution therefor of the following: · ( e) " Zambian grouping "refers to those companies that are members of a Zambian grouping within the meaning of subsection (3); (b) in.subsection (8)- (i) by the deletion of paragraph ( a) and the substitution therefor of the following: ( a) which does not carry any right either to conversion into shares or securities or _t.½e ;:�q�sit:i::m of uny-- additional shares or securities: 'G "" ; ":) •, r '· : �i ' ! I "f (ii)'by thf: deletion of :.'le word" and,; after paragraph (a); - (iii) by tli_e. deletion of the full stop_ at the end of paragraph (b) �od the substitution therefor of a semi colon and the word " and "; and • - , _ (iy)s by the insertion immediately after paragraph ( b) of the_ following new paragraph: · · ·_ · (CJ ill resp'!t::: of \vhiCh. L½.e .lcian Cfeditcris-� :emitleci, cm·_.repayment to :an :am:ouilt" · · �-,.�- · which aoes no"t exceed the amount lent. ·� ";• . ; · -,·\\). ' "t .. , .. �••:I••:,, - � • ,, ,H

1 .... .. . •,'� • . . · .. ·� .• / . , . . . . ' . . . , , , ' :,. ,•.•�,_:,., •.:• � · s.' Income includes the gross sale proceeds or proceeds Shares or from sale of options in respect of shares allotted, reserved or options acquired by an individual in terms of an 'approved share option scheme net of any amount paid for the acquisition or exercise of such shares or options by the individual concerned, and shares or options sold shall be deemed to be th.e shares or options longest held: " · ., d 1 ,:j Amendment of Second Schedule Provided that the relief afforded by sub-section (5) of section twenty-one shall extend to such income to tjle extent not absorbed by compensation received for foss of office or employment where the' gross sale proceeds are receivable within one year of termination of services.

20. The Second Schedule to the principal Act is amended- ( a) in clause (j) of sub-paragraph (1) of paragraph 5 by the insertion of the words " or approved share option scheme " after the word " society "; (b) in sub-paragraph (1) of paragraph 7 by the deletion of the words " education allowance or "; ( c) in paragraph 7 by the insertion after subparagraph (v) of the following new subparagraph: (w) by way of allotment or acquisition of shares in terms of an approved share option scheme. ( d) in subparagraph (1) of paragraph 8- (i) by the deletion of the definition "education · passage ". (ii) by the deletion in the definition of " leave passage." · of the words " undergoing full time education outside the Republic, between the place where· the child is receiving full-time education ·and the home country "; C· (iii) by the deletion in the definition of;'.' terminal -.- . passage '-' of the words .":or, in-the case· of �­ child of the individual undergoing fulHime· ·eaucation outside !lie Republic, from the place wher.e the _child fa rcccivh1g full-_tjmi educatioir to the·home country·"; --_ ·, (e} in- stibparagraph (5}'of pal:agfl!ph 8 by the deletibn of _ ;_·· •:" . . ·: _ _ paragrap� (iv) of the proviso; an_it il,:;;/:.:: -���!-�.C?�1d�}��.?�i�!.��!t-:�.���f�J7�J�. ;{!;:t�t;�,�>,1:���-� .. ··" �"\.'-1.��jl{i�;�t::,�;{!i>�''·;,�,��."�\;.� ... �,;:,,-,u_,,;g!i);/:�i1'<iilm'jtJ!ll�•�� ���':'� ..... :r•�""'¾i'l��- •✓�� . :.�::�-;,::� • .. �. �,(f"li:t{f.� ?� ... .f!t::ft6���:'�''"''.:,"�•r:; . ..-.:.!r� ... ��: . , -•,. ;. v;, :•, : -· ;. :-:· - _ - ,; ... _.. ___ , .. , _ _ _ ,:. --, . _

1 . , · , " J ' i -,, ,.r.-· _ ' , . . J ,, ' ,·.L·,, ' •• ' · itir,· c•- ·-- ·-" ,.--··-""" ...... !�ii �:':�:;,i�{;��=·���;:ra�:, ,,,.a,,.c,"'•·""T"""""�:,\ ti n �; ���o;:� �•v: ::r���r \ Amendment of Sixth ·· Schedule Insertion of new Eighth Schedule Amendment of Charging Schedule • �n:�:�:���,'_' and the substitution

22. The Sixth Schedule to the principal Act is amended in paragraph (1) by the deletion in the definition of" farm dwelling " of the words " one million kwacha " and the substitution therefor of the words " five million kwacha ".

23. The principal Act is amended by the insertion of a new Eighth Schedule set out in the Appendix to this Act.

24. The Charging Schedule to the principal Act is amended­ ( a) in sub-paragraph (1) of paragraph 1 by- (i) the c)eletion in clause ( a) of the words " one hundred and forty-four thousand kwacha " and the substitution therefor of the word " zero "; and (ii) the deletion in clause (b) of the words "one hundred and forty-five thousand two hundred kwacha " and the substitution therefore of the words " eighteen thousand kwacha ". (b) in sub-paragraph (1) oiparagraph 2� (i) by the deletion of clauses (c) and (d) and the substitution therefor of the following clauses: (c) on .th'e .balance of so much of an individual's income as does not exceed one million eight hundred thousand �n2.ch2. at the r=:tc of zero per cenn1m ··:;ie:- annum; and ( d) on the balance oi so much of an in'dlvidual's income as exceeds one _ miilion eight hundred thousand kw�c:i::, at the rate of thirty per cenrurn p7r 2.!UJum.; I , ..• . (ii) by the deletion of clause(e);, ( c) in subparagraph (2) .of paragraph 2 by the del�tion of the . words " sub-paragraph {c) to (e) of paragraph I " and the substitution therefor of the w.ords "clauses ( c) to ( d) of su�paragraph ((f'. (d) in .sub-paragraph (1) of,paragrdpli 3 by· the deletion of · .. • · . claus.e (e) and the suh�titution of the fo!!owing cl�;:�·e:. _ · . · . · ·. (�;" on the in6ome of any former Zambia Ccinsolidate_d__ ,_' ·: _ .. · · Copper Mining Company o�-ruiy.othei- �ping :· · . ' " .. ,- ' ·: . - . . ' ' ' ' ;,1·:_:.·_.-_:_:_:_::_,_:_ .. _·,:,_':_·:.::'.:_:_\_ .. ·.:::··:,:;_.:} ·. ·•" '. .. ' ,.· ,, . \ . . . • I • ' · ;, ' . � \, " " . • � ,-' . :•,'' . �-: . :- . ·- . ·, .. . - . - ' · •· ( c) at the rate of zero per centum per annum fcir any dividend paid by any former Zambia Consolidated Copper Mining Company or any other mining company involved in copper and cobalt production; ' (f) in the proviso to paragraph 7 by the insertion after sub­ paragraph (iii) of the following new sub-paragraphs: ,.-(iv) tax required to be deducted from any interest, royalties and management fees paid by the former Zambia Consolid/lted .Copper Mining Company or a n y other mining com p a n y involved i n copper and cobalt production t o its shareholders or affiliates or any lender of money shall in each case be deducted at the rate of zero per centum per annum; and (v) tax required to be deducted from any payment of interest on Government Bonds shall be the final tax. . . .... ,, . :;;::/r -: \·:�·.· ' .. _.,,, ..,, .... , .. ,_ , a. �tl:fli�@ti1;: ,.�y�-�\lit'i-�:1·; �' :;;-:;pit•_ -.• ,:t.,.i•1'1',1!.":�. ,,.,: i �ti;,YlW.t·f-;ri i:r��f!:'.� ... \ .. -. .r,., -\:.!,,(•: �:i:-:\)\ :·'·'·.� . ,,, ; . ·:·. ::,;_"-:. 1·::.:•>:i,, . ,. ,.'.\-'. . ' •• ••• • I • . ,, . ' 1,: ·': :_,. · .. 1 -, · 64 No. 3 of 2002] · Income Tax (Amendment) · APPENDIX (Section twenty-three) EIGHTI< SciJEDULE (Section thirty-seven A) Approved Share Option Schemes

1. In this Schedule, ·• trustee " means the person, by whatever name calJed, having the management or control of a scheme which is or was an approved share option scheme.

2. (I) Where any scheme is esJablished by or on behalf of an employer under which some or all of the employ�, (including Directors) or such employer become entitled to acquire shares or an interest iD shares in the issued or authorised equity capital of such employer or of some other entity specified in sub paragraph (2) (b) (i), an application may be made for that scheme Io be approved by the Commissioner-general. (2) The Com.missioner-General shaJl approve any share option scheme if satisfied that the constitution (whether by trust deed or otherwise) and rules relating to the scheme have as their main objective the entitlcrµent to acquire shares or an interest in shares as described in sub.paragraph (1), and that the entit�ement is, for a set number of shares, at a fixed price, for a specific type of share and during a set period of times: • Provided that- ( a) the scheme is esJablished in the Republic by or on behalf of an employer carrying on business wholly or partly within the Republic and employees who are citizens or permanent residents of the Republic regardless of the place where the duties of that employment are ·performed; and /b) the constitution and rules- 0 &) �) ;, ·, · ' (i) provide for the panicipation by all employees of the employer meeting clearly defined criteria or all employees of designated holding or subsidiary companies of the employer or other business enterprises which the Co'!I'-�:io::::.&.-G::.::.c..� z..::.::cpts as befog closely affiliated_ with the emP_l.oyer in accord:ince with th.is Act; (ii) restricts the criteria for p:?rticipation so as to• exclude cmpioyces wfio are nor mdfvidu:lls or have not worked -for the empl�ycr or entities specified in ire'rn '(i) fot a minimum of lWenty hours per week during the period of two years to ciigibiHty, 'or for at least five months as seas'ar.a.l foll-_llmc personuel' duciog such period: (iii) restrict th� cri;er_�a for participation so·as ro limit the totaJ numbc:r of shares ,or interests in shares to be �cquired under the··sche:::e by :.ny one; cmployCe io one-fifth of all of the shureS and imi:rests in shares issued or required . to be issued in ·tenns of the scheme; (iv) ·rcgllirt that. ou:·becom'ing �tig·i�!�}or· Particip�tion,'. :ifl �mploY.ees are. adyised by .the .employe; in-\\--rlting, of their eligi.biHty, of the co'nsdtution and rules of the __ ... -·�· .scheme. 'of the: rcsuJts 'of"'c.he SChCIDC 0VCI' the· last•tcn ,rm·.incial yeafS of operati�n or sinCc lnce.Ption if U!C _-,� sch,crne.�as b.-in esfeblished.for l�s Iha.a icn ye"? and.,' ·' · · : :�_>}:i;/ . < ': ... ... �\1k\::;t: � . . �:. / . � _ -:_ : �- >,;,• 1:.:c,, .. ii . .'' �-��-���"-�<.\!1· i'-��'/1f!: ... �:.. . ·.:1 I- 7'.�f}-���'l,1,fir.t,%J.;'( . < ,l l :.,'<>'f1·�;�;{J;'l�"'J't�.�i�� ._<tt .., ,:'Si�'Nif:r� , !j,:�-'.,�-i,f!J • •-ey;. ":'1r " �..-,..� ...... �......,., • .._�;-._&,..,..,.i.,_\�1�,)!",(.� "·.k�"t:- �:.,,1,:,:s il k,�� 1:, ·� ··:11��-1}��I��;Jt.f,m1:��Ji ,_,zi}?::>?r:r•?\?:�t�(.�ft�Et�1�1.\;�:-'itkrt�� -�#(,���.iiffo:f�¾:1.:v-r-'--·.-:��-t�J:�1:::,-,?.,.�f;,,;'l.11;i,'1.i�:,,\��:�-:.��:�n}'i1;'\r����-.�,x,�>) ,' . ( . t.: ·,.Jr*.it:"t�� ; . ,_.•• . : · .. ' �:t ;: . • ,_••�· • , .:.,;��'--�::�� -��-- .. ,, ·. ,, ••. , •• �- ��--\-.. :� .-'r· , , •• ,l I • ·•,; . _ ,, • •j:g · • c.. c .,�•· '. . · . ,, ,:,-, ).I . • Ii . JI • �:i . . . . , . . 'C: ,. . , · . . · ': . ;.-. • :-t.- . - � ' . " ,· ,y,: J/� �.:.�• ·r ,; ,. • I ���::'.����t@:����r: :V·xfq��,��-��'.�Y�d.:�;��t:!.t�?ffi��·�!����::'ff¥�(�1;:�'�f{��J�"f:�! � � I :;;:\i � ;;;�;;.;=;; 2002 65 < �- ',,_ .; .' '>--�· � - i_; ; ., ,. '.·•,;,:_1:·:\·':::,:::.:,.:,:_:_:.:,:,�.:,:_l':,;_jl:, -_ I ••' " . ' . :,,. :.· :• '• , , , , , ', o· - , ··:': •, · ••'·'. with panicipation in such schemes in general and the �player's scheme in particular, eXcept that the price of the shares shall be fixed at the time the option is given and the price shall not be·Jess.than the market value of the shares at that time, and only ordinary shares of th1 company may participate jn the scheme; (v) require that 1111 shares and interests in shares acquired through the scheme are registered, with the derails of the prices at which sbaI'CS and interCSts in shares are issue� exercised, sold or relinquished whether by effluxion of time or otherwise; (vi) require that all administrative and other expenses of the scheme are borne by the employer, and that the scheme shall be independently audited by the auditors or independent accountants who examine or report on the financial statements of the employer; (vii) require that eligibility for participation in the scheme and • the eXtcnt of that participation shall be on the basis of ·the period of service with the employer or other entities specified in item (i), basic emoluments over a defined period, termination of service benefits from employer or other entities specified in item (i) or a combination of some or all of these criteria which shall apply equally to all employees who are in the service of the employer and arc not on notice by either party for termination of service at the date eligibility arises except to the extent that the rules of the scheme permit accrued or othCr terminal benefits to be applied for participation in the scheme; (viii) require that in the case of a scheme which provides for acquisition of shares or interests in shares in a private company notice of intent tO sen or relinquish such·shares­ ar interests in shm-es ·shall be deemed to be given by an cinpioyee pan.icipatirig in. tbe schcine on termination of service or on death, and that. any amount unpa.id in �t of the acquisition price of sllch shares or interests ill shares, shall be recoverable by the tru.<tees from the sale proceeds, but not .exceeding that amount. in the event o_f dcatli: . . · (ix) require the trust�s and the Cmpioyer to act as tAX.pay�r agent for an employee panicipating, in the scheme for all matters connected with the scheme including the · taxation of proceeds of shares or interests in shares sOld or otherwise disposed of by employees participating in . the scheme; (x) provide that the _;,,heme may be tcnninated et the instigation -_ of an en_1ployer wh� shares and interests in shares held. by employees participating in_[!ie �h_em� are !l)e su�je<;f. "ofuncoiJditional arrangements.for. sale by participants ·at fnir market vaIUe as certified bi the audiior of the_ .. . �· .. . - - - - - : . _ . . . , : .: .· - 0 . cschemc and the cmpl yer;·; � . --- - ·: .___, _ ·._;· ' . _ :--·· • • :· ' • , , ::--�:;:l·�-='•l .,t ·. -_�::-__ : , : i . _ . . : · -� •1· ' ,, . .1. · .) • I '.�§ . :j1''1 . . · . . •t I ,:,: " . • �1,-_, · � ·· • • · · . : -; .� :� ,- _ , :::.. -_ ,\_,. .-.·, '•'· :,; (i ., ·-, ·-- _, . � _ _ _· . _ _ , .• • i , - 66 No. 3 of 2002] Income Tax (Amendment) • . , _ (xi) do not pre�ent ·an employee participating in the scheme from selling the employees shares on the basis of the price formula detailed herein after five years from acq_uisition of such shares or interests in shares, except where the date of tennination of service with the. employer or of the death of the employee in the course of the realis.itioa of that employee's estate is earlier: (xii) do not provide for the issue to or acquisition by employees of shares as interests in shares conveying a preference as to dividends unless such shares participate in dividends declared on ordinary shares in the same entity in excess of the level of Such preference and confer rights of participation on dissolution or redemption no less favourable than the rights ottributablc to holders of such ordinary shares or interests therein; (xiii) do not ·require any participating employee re conniDute additional amounts beyond amounts determinable in tenns of the constitution and rules at the date of the� empIOyee agreeing to participate in the scheme; (xiv) do not permit the rules or constitution to be amended in a manner detrimental to employees panicipating in the scheme without the consent of the trustees, and without co�ation from the Commissioner-General; (xv) do not pcnnit the granciog of credit for any amount towards financing the exercise of an option to acquire shares.

3. (1) In this Schedule " employee " or·• employer •• includes any employee or employer specified in paragraph 2 (2) (b) (i) except !hot as regards provision of financial information where an option scheme extends to holding or subsidiary companies or affiliates financial information shall be provided only to employees participating in the scheme or to employees eligible to participate in the scheme in respect of a company in which they are or will be entitled to acquire shares or interests in shares and !hat !he auditors required in terms of paragraph 2 (2).(b) (vi) shall apply only to the employer who undenakcs the· administration of the fund or its procurement and, if more than one, to such employer having the largest number of panicipants in the scheme; (2) In this. Schedule "shares" m��m: :my share� issued by a company d_uly. incorporated under the written laws of the Republic or elsewhere conveying • rights to :n: im.:iivid:d s�:ire o!' i:.. �istribr::ab!� profits and of proceeds aris!n:; on dissolution or winding-:up of such company and "interest in shares" means an employee's enrltlemc_nt ro share� held by· or op b-!half of suCh a scheme and to the employee's right, if "any, to exercise an- option to acquire- shares. . , 4. (I) An· application for approval of any share option sche;nc under 'paragraph 2. may be m'ade by the·trustc-es of the scheme or a sponsorip.g employer prior to appointment of such trus1e;s in writing to the C()Inmissioner-Ce!l::::al:\:,, · 1- and the application shall be accor,np�ied by a copy of the instrument �onstitutillg , thc scheme and of the rules relating to the scheme. , ., .. : .j ' . ..... . (2) Within one· month 0(su6missi6�0:· of iirlY ap�iicntJori ref��d lO in ·51Jb,i : , paragraph (!), !he Co!l\™ssioner-Geuelal sholl inform !he opplicom.in, writing of approval or rejection- of the shate. option scheme· and of, the. charge year in · · - - .- n:iatiori· to "WhiCil it is"apJ)l'oved; . . . (3) Vlh= any shm-o option scbo\rie-hos been' approved by. the Com:ni,;sionor­ qcneral under sub paragraph (2) for any charge year, the scheme shall be deemed ·· to be ·approved for"ea:ch Stibseqllent c·uargc yCiJ;' unless thC COriimissiciner•General ·- . ·• · . · . . - - · , . . .,., " . . ' withdraws appro�al under'sub-�aragrapb (5). . · · . - - ' : ' .- � ' . .... :" � , • I . ,· •� , " C, , '• . . ", ; ·• , .t'.. •.·.�:. ,::.,. ,._,:,"': '?-2·'. .: �ltilJ-, \ '"- (;:f � .-· - - . ,·· - ' t� /�� · - 't>:•' --; ,:•.,.• C O t,i.', .. •/•.:y � �-" ,'. :1 '*l'' ->21;,:} . :J;, . :fJ{f{{::''// f: 1 • • ' . ,A�- "•,l)i,�;;-:, .. �p•«.;·r>.c�,1i::<!"I:�" ,. �44w���w�,;�1fe��1����s��1\t:¢��1fal��5trm:½�I .� ��- ...- ,.. .f,�_·,t,�f_,;tff_J_"-_;�_.ttf,·r_��p;_;:·· ?i��)-��.J1t!/irii�fff�J����,}Pf��i�-�r-:�:w ·:_t,'.l{'.f�t;'��:"�.1>...:,r ·'••��-;! ?1r:•�\' ��t�:r�7,:· • I Jncome Tax (Amendment) [No. 3 of 2002 67 ·~ . . • . - !.ir,t·::-r.n,_11 ,,.,,,l�.• .. � , ';-;{t;.;1:/·:,; r�*h�•.d�::� ':.: :: ·'.t ' c. ...._, :.;:.::�r:· .;. t'.�� ... /·:··' • •. (4) Where there is any alteration to the instrument constituting'any share option scheme approved by the Commissioner,Genoral under this Schedule or to any rules relating to any such scheme, the trustee of the scheme shall forthwith infonn the Comrnissioncr•Gencral in writing of the alteration; and, if the Commissioner-General i,; not so informed, the approval of the scheme shall be deemed.to have been suspended_as from the date of the alteration. · (5) nie Commissioner-General shall at any time by notice in writing !"ithdnw, approval of any share option scheme if satisfied that- .( a) the conditions set oat in paragraph 2 on w�icb the approval of the scheme was granted have not been complied wi�; or (bJ .thcrc has been any alteration to·the instrument constit�ting the scheme or to any rules relating to it resulting in the non compliance with the conditions set out in paragraph 2. (6) l1> the �vent of suspension or withdrawal of approval in .respect of a share option �Cherne the Commissioner-General shall ensure, as far ns practical that employees participating in the scheme arc not prejudiced as regards transactions they have irrevocably committed themselves to prior to receiving notification of such suspension or withdrawal.

5. Where under this Schedule the Commissioner-General rejects an application to awn>ve a share option scheme, or suspends or withdraws approval from any scheme, any person aggrieved by the refusal of the Commissioner­ General to grant approval or by the suspension or withdrawal of any approval, may appeal therefrom as if the refusal or suspensioa or withdrawal of approval were a determination of the Commissioner-General under this Act ..... . . . ' ; , . ,, f: c ,­., ... . . . .. , - ·· - 1,,n• •• .:\ . . · ': . · .,, · · · -· . ·- . i, ;, . · . _--: _ . .: -- .. -·- . - , . ,: : .. -. : .. ,,.:,: ·.,a,i,; : , / _ . ,�- ;;f}�--- ·=-.:t_;./:· ,/�'..-:.-\,�;:.J"i-( - · . ::>.:.:; _: ':c::-- -. . _.,\ _., ' . -- -- - - �- . .. ...- .- . . -. ·- .· -· !1 - ... - ..... ,.. - - ? , · - -- �-� . . .. . ,-., .... . - �f"�·''•' f • 7 ____ ,._ • .,;.._ . . ....... _ ....... -, . ..... � .. J .... . , .. . --= - •·.• ·-..., .. . -•• ��-� . .. . \ .. ;_