Category: Section 12L (ITA) – Deduction in respect of energy efficiency savings

Section 12L

 

  1. Subsection (2) substituted by section 38 of Act 31 of 2013 effective on 1 November 2013.

 

  1. Words preceding paragraph (3)(a) substituted by section 38 of Act 31 of 2013 effective on 1 November 2013.

 

  1. Section 12L inserted by section 27 of Act 17 of 2009, amended by section 27 of Act 7 of 2010 and substituted by section 29 of Act 22 of 2012 effective on 1 November 2013.

Section 12L (ITA) – Deduction in respect of energy efficiency savings

Posted on by admin_kmos

12L     Deduction in respect of energy efficiency savings

(1)     For the purpose of determining the taxable income derived by any person from carrying on any trade in respect of any year of assessment ending before 1 January 2026, there must be allowed as a deduction from the income of that person an amount in respect of energy efficiency savings by that person in respect of that year of assessment determined in accordance with subsection (2), subject to subsection (3).

[Subsection (1) substituted by section 19(1) of Act 34 of 2019 and by section 9(1) of Act 20 of 2022 effective on 1 January, 2023]

(2)    The amount of the deduction contemplated in subsection (1) must be calculated at 95 cents per kilowatt hour or kilowatt hour equivalent of energy efficiency savings.

[Subsection (2) substituted by section 38 of Act 31 of 2013 and section 24 of Act 25 of 2015 effective on 1 March 2015]

(3)     A person claiming the deduction allowed in terms of subsection (1) during any year of assessment must obtain a certificate issued by an institution, board or body prescribed by the regulations contemplated in subsection (5) in respect of the energy efficiency savings for which a deduction is claimed in respect of that year of assessment containing-

(a)     the baseline at the beginning of the year of assessment;

(b)     the reporting period energy use at the end of the year of assessment;

(c)     the annual energy efficiency savings expressed in kilowatt hours or kilowatt hours equivalent for the year of assessment including the full criteria and methodology used to calculate the energy efficiency savings; and

(d)     any other information prescribed by the regulations contemplated in subsection (5).

(4)     A deduction must not be allowed in terms of this section if the person claiming the allowance receives any concurrent benefit in respect of energy efficiency savings.

(5)     The Minister of Finance, in consultation with the Minister of Energy and the Minister of Trade and Industry, must make regulations prescribing-

(a)     the institution, board or body that must issue the certificate contemplated in subsection (3);

(b)     the powers and responsibilities of the institution, board or body contemplated in paragraph (a);

(c)     the information that must be contained in the certificate contemplated in subsection (3) in addition to the information contemplated in that subsection;

(d)     those benefits that constitute concurrent benefits for the purpose of subsection (4); and

(e)     any limitation of energy sources in respect of which the allowance may be claimed.