The 12I Tax Allowance Incentive is designed to support Greenfield investments (i.e. new industrial projects that utilise only new and unused manufacturing assets), as well as Brownfield investments (i.e. expansions or upgrades of existing industrial projects).
Objectives of the grant is to support:
-
Investment in manufacturing assets, to improve the productivity of the South African manufacturing sector; and
-
Training of personnel; to improve labour productivity and the skills profile of the labour force.
The minimum investment in Qualifying Assets required is R50 million for a greenfield project and an additional investment of R30 million for a brownfield project.
How to calculate the tax allowance of the 12I Tax Allowance Incentive
First of all, the Dti will send an “its approved letter” which will tell you the exact amount approved for your qualifying assets and secondly Sars will publish notices regarding companies that were approved for the section 12I tax allowance, therefore, there will be no confusion on the exact amount the Dti approves.
Greenfield investments
-
55% of Qualifying Assets or a maximum of R900 million investment allowance with a Preferred Status. (100% if located in a Special Economic Zone of “SEZ”)
-
35% of Qualifying Assets or a maximum R550 million investment allowance with a Qualifying Status (75% if located in a Special Economic Zone or “SEZ”)
Brownfield investments
-
55% of Qualifying Assets or a maximum of R550 million investment allowance with a Preferred Status. (100% if located in a Special Economic Zone of “SEZ”)
-
35% of Qualifying Assets or a maximum R350 million investment allowance with a Qualifying Status (75% if located in a Special Economic Zone or “SEZ”)
Going forward, Business Grants and Dream Team Capital can play an even more important role in the co-ordination, integration and reporting on the consolidated performance of the various fragmented energy efficiency initiatives in the country. Contact us today for professional assistance in streamlining your application for the 12I Tax Allowance Incentive…
