What are corporate tax exemptions and credits in South Africa
Published February 21, 2022
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Paying tax is inevitable and an essential part of a prosperous country. There are, however, opportunities for companies to apply for tax exemptions and credits when applicable.

Here are some options available to you:

Corporate tax exemptions in SA

If you operate as a non-profit or a public benefit organisation, you are exempt from paying corporate tax in SA. You can deduct the following from taxable income as an allowable business expense for regular companies.

Business Expenses

All expenses that you incur as part of running your business. It includes material and equipment costs, utilities, employee costs, wholesale purchase costs for good resold, administration costs, business rental, office supplies, travel, uniforms, financial charges, legal fees, marketing, and promotion.

Capital Expenses

These include capital equipment, renovation costs, and machinery.

Start-up expenses

Any expenses you incur before the first year of trade can include your business costs, marketing, and promotion fees like your company website.

Net operating costs

Any net losses you have incurred the previous year.

Corporate tax credits in SA

Over and above the exemptions, you can receive the following tax credits or incentives.

Foreign Tax Credit

If you pay tax in another country, you can claim this back, as long as it is all declared on a tax return.

Research and Development costs

You need to get approval, but you can claim 150% of your R&D costs from your tax.

Industrial policy projects

Any investment in energy-efficient projects gets a tax exemption for anyone in manufacturing. The tax allowance can be up to 55% of the cost of the manufacturing asset and a training allowance. (Not more than R900 million)

Energy Efficiency savings

You can claim a deduction equating to R0.95 for every kilowatt-hour saved during the current tax year.

Venture Capital Companies

Any investors in small and medium-sized businesses can claim a tax incentive through their venture capital.

Special Economic Zones

If you operate in any of the country’s special economic zones, you get a 15% tax exemption, as well as a 10% allowance towards new/unused building costs. You can even apply for a reduction in employee tax.

South Africa as your HQ

You can also apply for company exemptions if you have SA as your global headquarters.

Bizcash is a South African company that wants to grow SMEs in SA to ensure a sustainable future for all.

Speak to our team to find out more about how we can support your business with alternative funding options. Get in touch with us on 0861 93 93 93 or email us on info@bizcashscf.co.za or contact us here.

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Categories: Business / Finance