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SAIT obtains clarity from SARS regarding section 24P repair allowance for ships

28 April 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Prior to its deletion, section 14(1)(c) of the Income Tax Act No. 58 of 1964 ("the Act”) provided for an allowance on expenditure to be incurred in respect of future repairs to ships. The allowance was calculated based on a method provided in Practice Note No 1 dated April 1996. Section 14(1)(c) was then inadvertently repealed by the 2013 Taxation Amendment Act and section 24P was inserted into the Act the following year to effectively reinstate section 14(1)(c).

This gave rise to some uncertainty regarding whether the section 24P allowance should be calculated based on the method prescribed in Practice Note 1. 

The SAIT was requested to obtain clarity from SARS regarding the matter and the following non-binding private opinion was obtained. In short, SARS are of the opinion that the section 24P allowance must be calculated based on the method provided in Practice Note 1.

Please click here to access the SARS opinion. 


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.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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