Section 10, The Finance Act, 2013

Section 35 of the Income Tax Act, 2000 is repealed andreplaced by the following new section– 35 (1) In ascertaining a person’s chargeable income for a year of assessment, the amount of financial cost deducted shall not exceed the amount referred to in subsection (3). of section 12 of section 13 of section 16 section 21 of Act No. 8 of 20 00 of section 4 section 30A of Act No.8 of section 31 of Act No.8 of section 35 of No. 8 of 2000.“Financial cost. No. 3 Finance Act 2013 No. 3 Finance Act 20136 7 (2) The amount of financial cost referred to in subsection (1) is the sum of – (a) financial gains derived by the person, that are to be included in ascertaining the person’s chargeable income for the year of assessment plus; (b) fifty percent of the person’s chargeable income calculated without including financial gains derived or deducting financial costs incurred by the person. (3) Financial cost for which a deduction is denied as a result of subsection (1) may be carried forward and treated as incurred during the next year of assessment except where there is a change in control as specified in section 88. (4) The Commissioner-General may by Statutory Instrument prescribe the circumstances under which financial costs may be set against financial gain. (5) For the purpose of this section– (a) “financial cost” means standard interest and any other amount payable under a financial instrument; (b) “financial gain” means standard interest and any other amount receivable under a financial instrument; (c) “financial instrument” has the same meaning prescribed by Statutory Instruments made under the Act and in the absence of such Statutory Instrument, takes its meaning from generally accepted accounting principles and includes foreign currency positions.”