433369666-The-Case-for-Investing-in-South-Africa

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ATTRACTIVE INCENTIVES TO
SUPPORT INVESTMENT
The South African government offers a comprehensive suite of financial grants, tax incentives and other forms of
business support to investors.
Incentive programme
Research and Development (R&D)
Critical Infrastructure Programme
(CIP)
Energy savings tax deduction
Incentive for industrial policy
projects
Agro-Processing Support Scheme
(APSS)
Automotive Investment Scheme
(AIS)
National Gazelles programme
Description
A 150% deduction of R&D expenditure when determining taxable income.
Qualifying R&D activities include:
• Discovery of novel, practical and non-obvious information;
• Development and/or creation of new inventions;
• Developing or improving knowledge seen as essential for use in new
inventions.
Approvals for claiming R&D tax incentives should be obtained from the
Department of Science and Innovation.
A cost-sharing grant that lowers the cost of doing business by targeting
industrial investment projects incurring costs in the development of bulk
infrastructure. Grant covers 10% to 30% of total qualifying development
costs.
Tax deduction for energy savings, dependent on energy savings certificate
issued by the South African National Energy Development Institute, priced
at ZAR0.95/kWh.
Income tax allowance for industrial projects – greenfield or brownfield.
Allowance dependent on project classification as normal or preferred
status. For normal status, tax allowance amounts to 35% of the cost of
new and unused manufacturing assets, which can increase to 55% to
100% for preferred status projects.
• Companies may make deductions for training costs to a maximum of
ZAR36 000 per employee.
APSS aims to stimulate investment in the agro-processing sub-sector,
offering a grant of 20% to 30% of qualifying costs incurred for investments
that increase capacity, generate employment, improve competitiveness
and productivity, and support broad-based black economic empowerment.
Costs include those incurred for machinery, equipment, commercial
vehicles, buildings, systems automation and accreditation.
Supports light, medium and heavy vehicles and components and tooling
manufacturers in the automotive value chain. Covers 20% to 30% of
qualifying investment costs.
A publicly-funded high-growth accelerator for SMEs in each of the 10
priority industry sectors identified in the NDP. It facilitates access to
finance, skills development and training, and access to business advisory
services.