SECTION 12 I
“Industrial Policy Projects”
What is 12i about?
• Tax Allowance
• Deduct from taxable income. NB: not from tax
• Greenfield projects > R200m
• Brownfie...
Section12 i
How much?
INVESTMENT ALLOWANCE
TYPE OUTSIDE
IDZ
INSIDE
IDZ
MAXIMUM
Qualifying
status
35% 75% Green = R550M
Bro...
How much (cont.)
Section12 i
TRAINING ALLOWANCE
Qualifying
status
Lower of
R36 000 per
employee or
actual training cost
Ma...
How it works
• Applications are governed by tax act and
Treasury
• Strenuous requirements
• Applicant is not allowed to ma...
Prerequisites to apply
• Manufacturing only
• Spend at least 2% of wage bill on training cost
going forward
• Energy effic...
Points scoring
Max
Will use innovative processes? 1
Improved energy efficiency with emphasis on
cleaner technology? 2
Gene...
Conclusion
• Great for large companies
• Great for those located in an IDZ or SEZ
• Onerous requirements
• Not much time l...
Section 12 i
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Section 12i

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Section 12i

  1. 1. SECTION 12 I “Industrial Policy Projects”
  2. 2. What is 12i about? • Tax Allowance • Deduct from taxable income. NB: not from tax • Greenfield projects > R200m • Brownfield projects > R30 m • Closing for applications December 2014 • Investment window closes December 2015 Section 12 i
  3. 3. Section12 i How much? INVESTMENT ALLOWANCE TYPE OUTSIDE IDZ INSIDE IDZ MAXIMUM Qualifying status 35% 75% Green = R550M Brown= 350M Preferred status 55% 100% Green = R900M Brown = R550M
  4. 4. How much (cont.) Section12 i TRAINING ALLOWANCE Qualifying status Lower of R36 000 per employee or actual training cost Max: R20 Million Preferred status Max: R30 Million
  5. 5. How it works • Applications are governed by tax act and Treasury • Strenuous requirements • Applicant is not allowed to make any financial commitment before approval is received, except acquire land. • Approval has no expiry date Section 12 i
  6. 6. Prerequisites to apply • Manufacturing only • Spend at least 2% of wage bill on training cost going forward • Energy efficiency: Brown fields – improve by 10%; Green fields: ultra modern (as adjudged by National Energy Efficiency Agency Panel) • Disqualified if benefits received from another program Section 12 i
  7. 7. Points scoring Max Will use innovative processes? 1 Improved energy efficiency with emphasis on cleaner technology? 2 General Business Linkages ? 1 Acquiring goods & services from small, medium or micro enterprises? 1 / 2 Direct employment creation* 2 Skills development* 2 Location in industrial development zone? 1 / 0 Requires 5 to achieve “qualifying status” and 8 to achieve “preferred status” 10 *in addition to above: requires 2 to qualify 4 Section 12 i
  8. 8. Conclusion • Great for large companies • Great for those located in an IDZ or SEZ • Onerous requirements • Not much time left Section 12 i
  9. 9. Section 12 i

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