South Africa
R&D Super Deduction and Depreciation Allowance
South Africa provides R&D incentives with the goal of encouraging private-sector investment in scientific and technological R&D activities.
Description of Incentive
- R&D Super Deduction – South Africa allows a deduction equal to 150% of expenditure incurred directly for research and development activities. Companies must be pre-approved by the Department of Science and Technology to be eligible for the deduction.
- R&D Accelerated Depreciation – Capital expenditure incurred on machinery or plant used for R&D are eligible for accelerated depreciation. Rates vary from 20% to 50% and depend upon the age of the machinery, when it was first bought and how many years its been in use.
Eligibility Requirements
A wide range of industries are eligible for the super deduction, including:
- Software
- Pharmaceutical
- Energy
- Automotive
- Manufacturing
- Agriculture
- Mining and natural resource
Qualified R&D activities must be performed within South Africa and involve a process of experimentation, generate new knowledge and result in a new or improved product or process.
Other Considerations
R&D benefits are able to be carried forward only when the business receiving the deduction is in a tax loss position.
Services
Swanson Reed offers the following services:
- Advice on tax preparation relevant to claiming the R&D tax credits incentive
- Preparation of documents relating to filing and substantiating a R&D taxation claim
- R&D tax advice and consultations
- R&D tax claim planning and preparation
For a full range of services in relation to the credit, please click here.
