Interpretation Note 67 was published on 1 November 2012.
This Note provides guidance on the interpretation and application of the definition of a "connected person" in section 1 of the Income Tax Act.
The Value-Added Tax Act No. 89 of 1991 contains a definition of the term "connected persons" in section 1(1) of that Act. Apart from the fact that the term is defined in the plural, there are a number of other significant differences between the value-added tax definition and the income tax definition. For example, the value-added tax definition includes the estates of deceased and insolvent persons, a partnership and in specified circumstances a branch or division of a person, while the income tax definition does not. Although the two definitions share some common features, this Note only focuses on the income tax definition and should not be relied on for purposes of interpreting the value-added tax definition.
The Tax Administration Act contains a definition of a "connected person" in section 1 which is cross-referenced to the income tax definition.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.