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DRAFT INTERPRETATION NOTE 59 (Issue 2)

DRAFT DRAFT INTERPRETATION NOTE 59 (Issue 2) DATE: ACT : INCOME TAX ACT 58 OF 1962 SECTIONS : SECTIONS 1(1) DEFINITION OF GROSS INCOME , 12P AND THE ELEVENTH SCHEDULE SUBJECT : tax treatment OF THE RECEIPT OR ACCRUAL OF GOVERNMENT GRANTS CONTENTS PAGE Preamble .. 2 1. Purpose .. 3 2. Background .. 3 3. The law .. 4 4. Application of the law .. 4 Section 1(1) Definitions of gross income and income .. 4 Total amount in cash or otherwise .. 5 Received 6 Accrued to .. 7 Specific inclusions in the definition of gross income .. 8 Farming subsidies [definition of gross income in section 1(1) paragraph (l)] .. 8 Government grants as defined in section 12P [definition of gross income in section 1(1) paragraph (lC)] .. 8 Receipt or accrual of a government grant - section 8(4)(a) recoupment and paragraph 20(3)(b) of the Eighth Schedule .. 8 5. Government grants and specific exemptions.

draft . draft interpretation note 59 (issue 2) date: act : income tax act 58 of 1962 . sections : sections 1(1) – definition of “gross income”, 12p and the eleventh schedule . subject : tax treatment of the receipt or accrual of government grants . contents . page . preamble

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