Section 12DA (ITA) – Deduction in respect of rolling stock

Posted on October 15, 2015January 21, 2023 by admin_kmos

12DA. Deduction in respect of rolling stock

(1) There shall be allowed to be deducted from the income of the taxpayer an allowance, in respect of rolling stock brought into use by the taxpayer on or before 28 February 2022, in the carrying on of a trade, in respect of the cost actually incurred by the taxpayer in respect of the acquisition or improvement of any rolling stock which is owned by the taxpayer, or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act and is used directly by the taxpayer wholly or mainly for the transportation of persons, goods or things to the extent that such rolling stock is used in the production of that taxpayer’s income.

[Subsection (1) substituted by section 34 of Act 31 of 2013, by section 15 of Act 23 of 2020 and by section 12 of Act 20 of 2021]

(2) The allowance contemplated in subsection (1) shall, in respect of any one year of assessment, be 20 per cent of the cost incurred in respect of any rolling stock.

(3) For purposes of this section the cost to a taxpayer of any rolling stock shall be deemed to be the lesser of the actual cost to the taxpayer or the cost which a person would, if that person had acquired or improved the rolling stock under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition or improvement of rolling stock was in fact concluded, have incurred in respect of the direct cost of acquisition or improvement of the rolling stock.

[Subsection (3) substituted by section 25 of Act 17 of 2017 effective on 18 December 2017]

(4) Where any rolling stock in respect of which any deduction is claimed in terms of this section was during any previous year of assessment used by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year, any deduction which could have been allowed in terms of this section during such year or any subsequent year in which such asset was used by the taxpayer shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.

(5) No deduction shall be allowed under this section in respect of any rolling stock that has been disposed of by the taxpayer during any previous year of assessment.

(6) The deductions which may be allowed or deemed to have been allowed in terms of this section and any other provision of this Act in respect of the cost of any rolling stock shall not in the aggregate exceed the amount of such cost.

Subsections 2, 2A, 3, 3A, 5, and 6 of section 12D of ITA

Posted on October 15, 2015January 21, 2023 by admin_kmos

(2) There shall be allowed to be deducted an allowance in respect of the cost actually incurred by the taxpayer in respect of the acquisition of –

[Words preceding paragraph (a) substituted by section 19 of Act 43 of 2014 effective on 1 April 2015]

(a)

(i) any new and unused affected asset; or

(ii) in the case of an asset contemplated in paragraph (c) of the definition of ‘affected asset’ any asset,

owned by the taxpayer that is brought into use for the first time by the taxpayer; and;

[Paragraph (a) substituted by section 23 of Act 35 of 2007, section 12 of Act 3 of 2008 and section 19 of Act 43 of 2014 effective on1 April 2015]

(b) the asset as contemplated in paragraph (a) which is used directly by such taxpayer for purposes contemplated in the definition of ‘affected asset’,

[Paragraph (b) substituted by section 12 of Act 3 of 2008 and section 19 of Act 43 of 2014 effective on 1 April 2015]

(2A) For the purposes of this section, if a taxpayer completes an improvement as contemplated in section 12N, the expenditure incurred by the taxpayer to complete that improvement shall be deemed to be the cost actually incurred by the taxpayer in respect of the acquisition of any new and unused affected asset contemplated in subsection (2).

(3) The allowance contemplated in subsection (2) shall not for any one year exceed –

(a) 10 per cent of the cost incurred in respect of any asset contemplated in paragraph (a) of the definition of “affected asset”;

[Paragraph (a) amended by section 19 of Act 43 of 2014 effective on 1 April 2015]

(b) 5 per cent of the cost incurred in respect of any asset contemplated in paragraph (aA), (b) or (d) of the definition of affected asset; or

[Paragrpah (b) substituted by section 12 of Act 3 of 2008 and seciton 19 of Act 43 of 2014 effective on 1 April 2015]

(c) 10 per cent of the cost incurred in respect of any asset contemplated in paragraph (c) of the definition of ‘affected asset’.

[Paragraph (c) added by section 19 of Act 43 of 2014 and substituted by section 28 of Act 23 of 2018 effective on 1 April 2019, applies in respect of assets acquired on or after that date]

(3A) Where any affected asset in respect of which any deduction is claimed in terms of this section was during any previous year of assessment used by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year, any deduction which could have been allowed in terms of this section during such previous year or any subsequent year in which such asset was used by such taxpayer shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.

(4) For the purposes of this section the cost to a taxpayer of any affected asset shall be deemed to be the lesser of-

(a) the actual cost of the asset incurred by the taxpayer; or

(b) the cost which the taxpayer would, if the taxpayer had acquired or improved the said asset under a cash transaction concluded at arm’s length on the date on which the transaction for the acquisition or improvement of the said asset was in fact concluded, have incurred in respect of the direct cost of acquisition or improvement of the asset (including the direct cost of the installation or erection thereof).

[Subsection (4) amended by section 23 of Act 35 of 2007 and substituted by section 24 of Act 17 of 2017 effective on 18 December 2017]

(5) No deduction shall be allowed under this section in respect of any affected asset which has been disposed of by the taxpayer during any previous year of assessment.

(6) The deductions which may be allowed or deemed to have been allowed in terms of this section and any other provision of this Act in respect of the cost of any affected asset shall not in the aggregate exceed the amount of such cost.

“Natural oil” definition of section 12D of ITA

Posted on October 15, 2015February 9, 2019 by admin_kmos

“natural oil” means any liquid or solid hydrocarbon or combustible gas existing in a natural condition in the earth’s crust and includes any refined by–products of such liquid or solid hydrocarbon or combustible gas.

“Affected asset” definition of section 12D of ITA

Posted on October 15, 2015February 9, 2019 by admin_kmos

(1) For the purposes of this section –

“affected asset” means any –

(a) pipeline used for the transportation of natural oil;

(aA) pipeline for the transportation of water used by power stations in the process of generating electricity;

(b) line or cable used for the transmission of electricity;

(d) railway line used for the transportation of persons, goods or things,

and includes any earthworks or supporting structures and equipment forming part of or ancillary to such pipeline, transmission line or cable or railway line and any improvement to such pipeline, transmission line or cable or railway line;

Section 12D (ITA) – Deduction in respect of certain pipelines, transmission lines and railway lines

Posted on October 15, 2015February 9, 2019 by admin_kmos

12D. Deduction in respect of certain pipelines, transmission lines and railway lines

Section 12C (ITA) – Deduction in respect of assets used by manufacturers or hotelkeepers and in respect of aircraft and ships, and in respect of assets used for storage and packing of agricultural products

Posted on October 15, 2015April 15, 2026 by admin_kmos

12C. Deduction in respect of assets used by manufacturers or hotel keepers and in respect of aircraft and ships, and in respect of assets used for storage and packing of agricultural products

[Heading substituted by section 20 of Act 31 of 2005 and section 27 of Act 23 of 2018 effective on 17 January 2019]

(1) In respect of any –

(a) machinery or plant (other than machinery or plant in respect of which an allowance has been granted to the taxpayer under paragraph (b)) owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by the taxpayer for the purposes of the taxpayer’s trade (other than mining or farming) and is used by the taxpayer directly in a process of manufacture carried on by the taxpayer or any other process carried on by the taxpayer which is of a similar nature;

[Paragraph (a) substituted by section 11 of Act 19 of 2001, section 8 of Act 9 of 2005, section 20 of Act 31 of 2005, section 32 of Act 31 of 2013 and section 20 of Act 25 of 2015 effective on 8 January 2016]

(b) machinery or plant (other than machinery or plant in respect of which an allowance has been granted to the taxpayer under paragraph (a)) owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is let by the taxpayer and was or is brought into use for the first time by the lessee for the purposes of the lessee’s trade (other than mining or farming) and is used by the lessee directly in a process of manufacture carried on by the lessee or any other process carried on by the lessee which is of a similar nature;

[Paragraph (b) substituted by section 20 of Act 31 of 2005, sectiion 32 of Act 31 of 2013 and section 20 of Act 25 of 2015 effective on 8 January 2016]

(bA) machinery or plant owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act and which was or is made available for use by the taxpayer in terms of a contract to another person for no consideration and was or is brought into use for the first time by that other person for the purposes of that other person’s trade (other than mining or farming) and is used by that other person solely for the benefit of that taxpayer for the purposes of the performance of that other person’s obligations under that contract in a process of manufacture under the Automotive Production and Development Programme administered by the Department of Trade, Industry and Competition or Automotive Investment Scheme administered by that Department;

[Paragraph (bA) inserted by section 20(1)(b) of Act 25 of 2015 and substituted by section 14 of Act 23 of 2020]

(c) machinery or plant (other than machinery or plant in respect of which an allowance has been granted to the taxpayer under paragraph (a)) owned by the taxpayer or acquired by the taxpayer as a purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by any agricultural co-operative registered or deemed to be incorporated under the Co-operatives Act, 1981 (Act No. 91 of 1981), or registered under the Co-operatives Act, 2005 (Act No. 14 of 2005) and is used by it directly for storing or packing pastoral, agricultural or other farm products of its members (including any person who is a member of another agricultural co-operative which is itself a member of such agricultural co-operative) or for subjecting such products to a primary process as defined in section 27(9);

(d) machinery, implement, utensil or article (other than any machinery, implement, utensil or article in respect of which an allowance has been granted to the taxpayer under paragraph (e)) owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by the taxpayer for the purposes of the taxpayer’s trade as hotel keeper and is used by the taxpayer in a hotel, except any vehicle or equipment for offices or managers’ or servants’ rooms;

[Paragraph (d) substituted by section 20 of Act 31 of 2005, section 32 of Act 31 of 2013 and section 27 of Act 23 of 2018 effective on 17 January 2019]

(e) machinery, implement, utensil or article (other than any machinery, implement, utensil or article in respect of which an allowance has been granted to the taxpayer under paragraph (d)) owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is let by the taxpayer and was or is brought into use for the first time by the lessee for the purposes of the lessee’s trade as hotel keeper and used by the lessee in a hotel, except any vehicle or equipment for offices or managers’ or servants’ rooms;

[Paragraph (e) substituted by section 20 of Act 31 of 2005, section 32 of Act 31 of 2013 and section 27 of Act 23 of 2018 effective on 17 January 2019]

(f) aircraft owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by the taxpayer for the purposes of his or her trade (other than an aircraft in respect of which an allowance has been granted to the taxpayer under section 12B);

(g) ship owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by the taxpayer for the purposes of his or her trade (other than a South African ship mainly engaged in international traffic as contemplated in section 12Q(1));

[Paragraph (g) added by section 13(1)(b) of Act 21 of 1995 and substituted by section 20(b) of Act 31 of 2005, by section 32(1)(a) of Act 31 of 2013, by section 32(1)(b) of Act 31 of 2013 and by section 14 of Act 5 of 2026]

(gA) new or unused machinery or plant, which is owned by a taxpayer, or acquired by a taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement in section 1 of the Value-Added Tax Act and is first brought into use by that taxpayer for purposes of research and development as defined in section 11D; or

(h) improvement (other than repairs) to any machinery, plant, implement, utensil or article referred to in paragraph (a), (b), (c), (d), (e) or (gA), which is during the year of assessment used as contemplated in that paragraph,

a deduction equal to 20 per cent of the cost to that taxpayer to acquire that machinery, plant, implement, utensil, article, ship, aircraft or improvement (hereinafter referred to as the asset) shall be allowed in the year of assessment during which the asset is so brought into use and in each of the four succeeding years of assessment: Provided that where –

(a) ……….

(b) ……….

(c) any new or unused machinery or plant referred to in paragraph (a) of this subsection or improvement referred to in paragraph (h) of this subsection, is or was –

(i) acquired by the taxpayer under an agreement formally and finally signed by every parry to the agreement on or after 1 March 2002; and

(ii) brought into use by the taxpayer on or after that date in a process of manufacture or process which is of a similar nature, carried on by that taxpayer in the course of its business (other than banking, financial services, insurance or rental business),

[Paragraph (c) added by section 15 of Act 30 of 2002, amended by section 30 of Act 45 of 2003 and section 20 of Act 31 of 2005 and substituted by section 20 of Act 25 of 2015 effective on 8 January 2016]

the deduction under this subsection shall be increased to 40 per cent of the cost to that taxpayer of that machinery, plant or improvement in respect of the year of assessment during which the plant, machinery or improvement was or is so brought into use for the first time and shall be 20 per cent in each of the three subsequent years of assessment;

(d) any new or unused machinery or plant referred to in paragraph (gA) of this subsection or improvement referred to in paragraph (h) of this subsection, is or was-

(i) acquired by the taxpayer under an agreement formally and finally signed by every party to the agreement on or after 1 January 2012; and

(ii) brought into use by the taxpayer on or after that date for the purpose of research and development as defined in section 11D,

the deduction under this subsection shall be-

(aa) increased to 50 per cent of the cost to that taxpayer of that machinery, plant or improvement in respect of the year of assessment during which the plant, machinery or improvement is or was so brought into use for the first time;

(bb) 30 per cent of that cost in the year of assessment immediately succeeding the year of assessment contemplated in item (aa); and

(cc) 20 per cent of that cost in the year of assessment immediately succeeding the year of assessment contemplated in item (bb)

: Provided further that where any machinery, plant, implement, utensil, article or improvement qualifying for an allowance under this section is mounted on or affixed to any concrete or other foundation or supporting structure and –

(a) the foundation or supporting structure is designed for such machinery, plant, implement, utensil, article or improvement and constructed in such manner that it is or should be regarded as being integrated with the machinery, plant, implement, utensil, article or improvement; and

(b) the useful life of the foundation or supporting structure is or will be limited to the useful life of the machinery, plant, implement, utensil, article or improvement mounted thereon or affixed thereto,

the foundation or supporting structure shall be deemed to be a part of the machinery, implement, utensil, article or improvement mounted thereon or affixed thereto.

(2) For purposes of this section the cost to a taxpayer of any asset shall be deemed to be the lesser of the actual cost to the taxpayer to acquire that asset or the cost which a person would, if he had acquired that asset under a cash transaction concluded at arm’s length on the date which the transaction for the acquisition of that asset was in fact concluded, have incurred in respect of the direct cost of acquisition of the asset, including the direct cost of the installation or erection thereof.

[Subsection (2) substituted by section 20 of Act 31 of 2005 and section 23 of Act 17 of 2017 effective on 18 December 2017]

(3) No deduction shall be allowed under this section in respect of –

(a) any asset which has been let by the taxpayer under a lease other than an operating lease as defined in section 23A(1), unless the lessee under such lease derives in the carrying on of his trade amounts constituting income for the purposes of this Act;

(b) ……….

(d) any asset in respect of which an allowance has been granted to the taxpayer under section 12E;

[Paragraph (d) added by section 8(c) of Act 9 of 2005, amended by section 32(1)(g) of Act 31 of 2013 and substituted by section 10(1)(a) of Act 42 of 2024 effective on 1 March, 2026 and applicable in respect of assets brought into use on or after that date]

(e) any asset the ownership of which is retained by the taxpayer as a seller in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act; or

[Paragraph (e) added by section 20(g) of Act 31 of 2005 and substituted by section 32(1)(h) of Act 31 of 2013 and by section 10(1)(a) of Act 42 of 2024 effective on 1 March, 2026 and applicable in respect of assets brought into use on or after that date]

(f) any asset in respect of which a deduction has been granted to the taxpayer under section 12V.

[Paragraph (f) added by section 10(1)(b) of Act 42 of 2024 effective on 1 March, 2026 and applicable in respect of assets brought into use on or after that date]

(4) ……….

(4A) Where any asset in respect of which any deduction is claimed in terms of this section was during any previous year of assessment used by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year, any deduction which could have been allowed in terms of this section during such previous year or any subsequent year that such asset was used by such taxpayer shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.

(5) The deductions which may be allowed or deemed to have been allowed in terms of this section and section 11(o) in respect of any asset shall not in the aggregate exceed the cost to the taxpayer of such asset.

(6) Any expenditure (other than expenditure referred to in section 11(a) incurred by a taxpayer during any year of assessment in moving an asset in respect of which a deduction was allowed or is allowable under this section or section 12B from one location to another shall –

(a) where the taxpayer is entitled to a deduction in respect of such asset under subsection (1) in that year and one or more succeeding years, be allowed to be deducted from his income in equal instalments in each year in which such a deduction is allowable; or

(b) in any other case, be allowed to be deducted from his income in that year.

Section 12B (ITA) – Deduction in respect of certain machinery, plant, implements, utensils and articles used in farming or production of renewable energy

Posted on October 15, 2015January 15, 2025 by admin_kmos

12B. Deduction in respect of certain machinery, plant, implements, utensils and articles used in farming or production of renewable energy

(1) In respect of any –

(a) ……….

(b) ……….

(d) ……….

(e) ……….

(f) machinery, implement, utensil or article (other than livestock) which is owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and brought into use for the first time by that taxpayer and used by him or her in the carrying on of his or her farming operations, except any motor vehicle the sole or primary function of which is the conveyance of persons or any caravan or any aircraft (other than an aircraft used solely or mainly for the purpose of crop-spraying) or any office furniture or equipment;

(g) machinery, plant, implement, utensil or article owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by the taxpayer for the purpose of his or her trade to be used for the production of bio-diesel or bio-ethanol,

(h) machinery, plant, implement, utensil or article owned by the taxpayer or acquired by the taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of the definition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act and which was or is brought into use for the first time by that taxpayer for the purpose of his or her trade to be used by that taxpayer in the generation of electricity from –

(i) wind power;

(ii)

(aa) photovoltaic solar energy of more than 1 megawatt;

(bb) photovoltaic solar energy not exceeding 1 megawatt; or

(cc) concentrated solar energy;

[Subparagraph (ii) substituted by section 19 of Act 25 of 2015 effective on 1 January 2016]

(iii) hydropower to produce electricity of not more than 30 megawatts; or

[Subparagraph (iii) amended by section 16 of Act 34 of 2019]

(iv) biomass comprising organic wastes, landfill gas or plant material; or

(i) improvements (other than repairs) to-

(i) any machinery, plant, implement, utensil or article referred to in paragraph (f), (g) or (h); and

(ii) any foundation or supporting structure that is, in terms of the proviso to this subsection, deemed to be part of the machinery, plant, implement, utensil or article referred to in paragraph (h),

which is during the year of assessment used as contemplated in the relevant paragraph, a deduction calculated in terms of subsection (2) shall be allowed in respect of the year of assessment during which such machinery, plant, implement, utensil or article or any improvement (hereinafter referred to as an asset) is so brought into use and each of the two succeeding years of assessment, such succeeding years of assessment hereinafter in this section referred to as the second and third years, in chronological order.

: Provided that where any machinery, plant, implement, utensil, article or improvement for which a deduction is allowed under paragraph (h) is mounted on or affixed to any concrete or other foundation or supporting structure and-

the foundation or supporting structure shall be deemed to be a part of the machinery, plant, implement, utensil, article or improvement mounted thereon or affixed thereto

(2) The deduction contemplated in subsection (1) shall be calculated on the cost to the taxpayer of the asset and the rate of the allowance shall be-

[Words preceding paragraph (a) substituted by section 22 of Act 17 of 2017 effective on 18 December 2017]

(a) in the case of an asset other than an asset contemplated in paragraph (b)-

(i) in respect of the year of assessment during which the asset is so brought into use, 50 per cent of such cost;

(ii) in respect of the second year, 30 per cent of such cost; and

(iii) in respect of the third year, 20 per cent of such cost;

[Paragraph (a) substituted by section 19 of Act 25 of 2015 effective on 1 January 2016]

(b) in the case of an asset contemplated in subsection (1)(h)(ii)(bb), 100 per cent of such cost

[Paragraph (b) substituted by section 19 of Act 25 of 2015 effective on 1 January 2016]

[Paragraph (c) deleted by section 28 of Act 15 of 2016 effective on 1 January 2016, applies in respect of years of assessment commencing on or after that date]

(3) For purposes of this section the cost to a taxpayer of any asset acquired by that taxpayer shall be deemed to be the lesser of the actual cost to the taxpayer or the cost which a person would, if he or she had acquired the asset under a cash transaction concluded at arm’s length on the date which the transaction for the acquisition of the asset was in fact concluded, have incurred in respect of the direct cost of acquisition of the asset, including the direct cost of the installation or erection thereof.

[Subsection (3) substituted by section 19 of Act 31 of 2005 and section 22 of Act 17 of 2017 effective on 18 December 2017]

(4) No deduction shall be allowed under this section in respect of –

(a) any asset which has been let by the taxpayer under a lease other than an operating lease as defined in section 23A (1), unless –

(i) the lessee under such lease derives in the carrying on of his trade amounts constituting income for the purposes of this Act; and

(ii) the period for which the asset is let under such lease is at least 5 years or such shorter period as is shown by the taxpayer to be the useful life of the asset;

(b) ……….

(c) any asset brought into use by any company during any year of assessment if such asset was previously brought into use by any other company during such year and both such companies are managed, controlled or owned by substantially the same persons, and a deduction under this section was previously granted to such other company;

[Paragraph (c) amended by section 7 of Act 9 of 2005 and substituted by section 19 of Act 25 of 2015 effective on 8 January 2016]

(d) any asset which has been disposed of by the taxpayer during any previous year of assessment;

(e) ……….

(f) any asset in respect of which an allowance has been granted to the taxpayer under section 12E;

[Paragraph (f) added by section 7(b) of Act 9 of 2005, amended by section 19(g) of Act 31 of 2005 and substituted by section 15(1)(a) of Act 17 of 2023 effective on 1 March, 2023]

(g) any asset the ownership of which is retained by the taxpayer as a seller in terms of an agreement contemplated in paragraph (a) of the definition of “instalment credit agreement” in section 1 of the Value-Added Tax Act; or

[Paragraph (g) added by section 19(h) of Act 31 of 2005 and substituted by section 31(c) of Act 31 of 2013 and by section 15(1)(a) of Act 17 of 2023 effective on 1 March, 2023]

(h) any asset in respect of which a deduction has been allowed to the taxpayer under section 6C or 12BA.

[Paragraph (h) added by section 15(1)(b) of Act 17 of 2023 effective on 1 March, 2023]

(4A) ……….

(4B) Where any asset in respect of which any deduction is claimed in terms of this section was during any previous financial year brought into use for the first time by the taxpayer for the purposes of any trade carried on by such taxpayer, the receipts and accruals of which were not included in the income of such taxpayer during such year, any deduction which could have been allowed in terms of this section during such previous year or any subsequent year that such asset was used by such taxpayer shall for the purposes of this section be deemed to have been allowed during such previous year or years as if the receipts and accruals of such trade had been included in the income of such taxpayer.

(5) The deductions which may be allowed in terms of this section in respect of any asset shall not in the aggregate exceed the cost to the taxpayer of such asset.

(6) Where a lessor of any asset under a lease contemplated in subsection (4)(a) has within the period contemplated in subparagraph (ii) of that paragraph, reckoned from the commencement of the period for which the asset is let under that lease, disposed of the whole or a portion of that lessor’s interest in the lease or of his or her right to receive rent under the lease, there must be included in that lessor’s income for the year of assessment during which the disposal is made a sum equal to the aggregate of any deductions allowed to that lessor under this section, less a proportionate amount in respect of the expired portion of the lease or any portion of that interest or right which has not been disposed of by the lessor.

[Subsection (6) substituted by section 19 of Act 31 of 2005 and section 19 of Act 25 of 2015 effective on 8 January 2016]

Section 11sex (ITA) – Deduction of compensation for railway operating losses

Posted on October 15, 2015February 9, 2019 by admin_kmos

11sex. Deduction of compensation for railway operating losses

For the purpose of determining the taxable income derived by any taxpayer from carrying on any trade within the Republic, there shall be allowed as a deduction from the income of the taxpayer so derived the amount of any compensation due to Transnet Limited and paid by the taxpayer (whether directly or through any trade association of which the taxpayer is a member) in respect of any loss incurred by Transnet Limited in operating any railway line, if –

(a) such railway line was constructed under or in pursuance of a written agreement with Transnet Limited in terms of which Transnet Limited undertook to operate the railway line;

(b) the compensation so paid was paid in order to discharge an obligation under the said agreement to pay such compensation; and

12. ……….

12A. ……….

Section 11E (ITA) – Deduction of certain expenditure incurred by sporting bodies

Posted on October 15, 2015April 9, 2026 by admin_kmos

11E. Deduction of certain expenditure incurred by sporting bodies

For the purpose of determining the taxable income derived by-

(a) any non-profit company as defined in the Companies Act; or

(b) an association of persons that has been incorporated, formed or established in the Republic,

from carrying on any sporting activities falling under a code of sport administered and controlled by a national federation as contemplated in section 1 of the National Sport and Recreation Act, 1998 (Act No. 110 of 1998), there shall be allowed as a deduction from the income of that company or association-

(i) expenditure, not of a capital nature, incurred by that company or association on the development and promotion, directly by that company or association ;or

(ii) any payment made to any other company or association contemplated in this section for expenditure to be incurred on the development and promotion,

of sporting activities contemplated in paragraph 9 of Part I of the Ninth Schedule falling under that code of sport.

Subsections 2, 4, 5, 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18 and 19 of section 11D of ITA

Posted on October 15, 2015April 15, 2026 by admin_kmos

(2)

(a) For the purposes of determining the taxable income of a taxpayer that is a company in respect of any year of assessment there shall be allowed as a deduction from the income of that taxpayer an amount equal to 150 per cent of so much of any expenditure actually incurred by that taxpayer directly and solely in respect of the carrying on of scientific or technological research and development in the Republic if-

[Words preceding subparagraph (i) substituted by section 18 of Act 43 of 2014 effective on 1 January 2014]

(i) that expenditure is incurred in the production of income;

(ii) that expenditure is incurred in the carrying on of any trade;

(iii) that scientific or technological research and development is approved in terms of subsection (9); and

[Subparagraph (iii) substituted by section 12(1)(j) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(iv) that expenditure is incurred within six months prior to or on or after the date of receipt of the application by the Department of Science and Innovation for approval of that scientific or technological research and development in terms of subsection (9).

[Subparagraph (iv) substituted by section 12(1)(k) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

[Paragraph (a) amended by section 18(1)(e) of Act 43 of 2014 (effective date in section 18(4) of Act 43 of 2014 as substituted section 64(1) of Act 17 of 2023) and by section 12(1)(i) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(b) No deduction may be allowed under this subsection in respect of expenditure incurred in respect of-

(i) immovable property, machinery, plant, implements, utensils or articles excluding any prototype or pilot plant created solely for the purpose of the process of scientific or technological research and development and that prototype or pilot plant is not intended to be utilised or is not utilised for production purposes after that scientific or technological research and development is completed;

[Subparagraph (i) substituted by section 12(1)(l) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(ii) financing, administration, compliance and similar costs.

[Subsection (2) substituted by section 13(1)(b) of Act 8 of 2007, amended by section 11(a), (b) and (c) of Act 3 of 2008 and substituted by section 16 of Act 17 of 2009, by section 32(1) of Act 24 of 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023) and by section 29(1)(a) of Act 31 of 2013 with effect from 1 January, 2014 and applicable in respect of expenditure incurred in respect of research and development on or after that date (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023)]

(3) ……….

[Subsection (3) substituted by section 13(1)(b) of Act 8 of 2007, amended by section 19(1)(b) and (c) of Act 35 of 2007, substituted by section 16 of Act 17 of 2009, by section 32(1) of Act 24 of 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023) and deleted by section 29(1)(b) of Act 31 of 2013 with effect from 1 January, 2014 and applicable in respect of expenditure incurred in respect of research and development on or after that date (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023)]

(4) Where any amount of expenditure is incurred by a taxpayer to fund expenditure of another person carrying on scientific or technological research and development on behalf of that taxpayer, the taxpayer may deduct an amount contemplated in subsection (2)—

(a) if that scientific or technological research and development is approved by the Minister of Higher Education, Science and Innovation in terms of subsection (9);

[Paragraph (a) substituted by section 12(1)(n) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(b) if that expenditure is incurred in respect of scientific or technological research and development;

[Paragraph (b) substituted by section 12(1)(o) of Act 17 of 2023 and by section 12 of Act 5 of 2026]

(i)

(aa) an institution, board or body that is exempt from normal tax under section 10(1)(cA); or

(bb) the Council for Scientific and Industrial Research; or

(ii) a company forming part of the same group of companies, as defined in section 41, if the company that carries on the scientific or technological research and development does not claim a deduction under subsection (2); and

[Paragraph (c) amended by section 29(1)(d) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and substituted by section 12(1)(p) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(d) if that expenditure is incurred within six months prior to or on or after the date of receipt of the application by the Department of Science and Innovation for approval of that scientific or technological research and development in terms of subsection (9).

[Paragraph (d) substituted by section 12(1)(q) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

[Subsection (4) substituted by section 16 of Act 17 of 2009, by section 32(1) of Act 24 of 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023), amended by section 29(1)(c) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and by section 12(1)(m) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(5) Where a company funds expenditure incurred by another company contemplated in subsection (4)(c)(ii), any deduction under that subsection by the company that funds the expenditure must be limited to an amount of 150 per cent of the actual expenditure incurred directly and solely in respect of that scientific or technological research and development carried on by the other company that is being funded.

[Subsection (5) amended by section 13(1)(c) of Act 8 of 2007 and substituted by section 32(1) of Act 24 of 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023), by section 18(1)(f) of Act 43 of 2014 (effective date in section 18(4) of Act 43 of 2014 as substituted section 64(1) of Act 17 of 2023) and by section 12(1)(r) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(6) For the purposes of subsections (2) and (4)-

(a) a person carries on scientific or technological research and development if that person may determine or alter the methodology of the research;

(b) notwithstanding paragraph (a), certain categories of scientific or technological research and development designated by the Minister in Regulation 343 of 23 April 2015 or by notice in the Gazette are deemed to constitute the carrying on of scientific or technological research and development.

[Subsection (6) substituted by section 13(1)(e) of Act 8 of 2007, by section 32(1) of Act 24 of 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023) and by section 29(1)(e) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023), amended by section 18(1)(g) of Act 43 of 2014 (effective date in section 18(3) of Act 43 of 2014 as substituted section 64(1) of Act 17 of 2023) and substituted by section 12(1)(s) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(7) Where any amount is received by or accrues to a taxpayer from-

(a) a department of the Government of the Republic in the national, provincial or local sphere;

(b) a public entity that is listed in Schedule 2 or 3 to the Public Finance Management Act; or

to fund expenditure in respect of any scientific or technological research and development, an amount equal to the amount that is funded must not be taken into account for purposes of the deduction under subsection (2) or (4).

[Subsection (7) substituted by section 11(d) of Act 3 of 2008, by section 32(1) of Act 24 of 2011 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023), by section 29(1)(f) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and by section 12(1)(t) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(8) . . . . . .

[Subsection (8) substituted by section 32(1) of Act 24 of 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023) and deleted by section 29(1)(g) of Act 31 of 2013 with effect from 1 January, 2014 and applicable in respect of expenditure incurred in respect of research and development on or after that date (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023)]

(9) The Minister of Higher Education, Science and Innovation or a person appointed by the Minister of Higher Education, Science and Innovation must approve any scientific or technological research and development being carried on or funded for the purposes of subsections (2) and (4) having regard to—

(a) whether the taxpayer has proved to the committee that the scientific or technological research and development in respect of which the approval is sought complies with the criteria contemplated in the definition of “scientific or technological research and development” in subsection (1)(j),

(b) . . . . . .

(c) such other criteria as the Minister of Finance in consultation with the Minister of Higher Education, Science and Innovation may prescribe by regulation; and

(d) the application for approval of the project being submitted by the taxpayer and received by the Minister of Higher Education, Science and Innovation in such form and containing such information as the Minister of Higher Education, Science and Innovation may prescribe.

[Subsection (9) substituted by section 13(1)(f) of Act 8 of 2007 and by section 32(1) of Act 24 of 2011 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023), amended by section 29(1)(h), (i), (j) and (k) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and substituted by section 12(1)(u) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(10) If scientific or technological research and development is approved under subsection (9) and-

(a) any material fact changes which would have had the effect that approval under subsection (9) would not have been granted had that fact been known to the Minister of Higher Education, Science and Innovation at the time of granting approval;

(b) the taxpayer carrying on that scientific or technological research and development fails to submit a report to the committee as required by subsection (13); or

(c) the taxpayer carrying on that scientific or technological research and development is guilty of fraud, or misrepresentation or non-disclosure of material facts which would have had the effect that approval under subsection (9) would not have been granted,

the Minister of Higher Education, Science and Innovation may, after taking into account the recommendations of the committee, withdraw the approval granted in respect of that scientific or technological research and development with effect from a date specified by that Minister.

[Subsection (10) substituted by section 32(1) of Act 24 of 2011 2011 (effective date in section 32(2) of Act 24 of 2011 as substituted section 168(1) of Act 22 of 2012 and by section 57(1) of Act 17 of 2023), amended by section 29(1)(l), (m) and (n) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and substituted by section 12(1)(v) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(11)

(a) A committee must be appointed for the purposes of approving scientific or technological research and development under subsection (9) consisting of-

(i) three persons employed by the Department of Science and Innovation appointed by the Minister of Higher Education, Science and Innovation;

(ii) one person employed by the National Treasury, appointed by the Minister of Finance; and

(iii) three persons from the South African Revenue Service, appointed by the Minister of Finance.

(b) The Minister of Higher Education, Science and Innovation or the Minister of Finance may appoint alternative persons to the committee if a person appointed in terms of paragraph (a) is not available to perform any function as a member of the committee.

(c) If any person is appointed as an alternative in terms of paragraph (b), that person may perform the function of any other person from the Department of Science and Innovation, or the South African Revenue Service in respect of which institution that person is appointed as alternative.

[Subsection (11) substituted by section 3(1)(a) of Act 9 of 2007, by section 1(1) of Act 25 of 2011 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023), amended by section 18(1)(h) of Act 43 of 2014 (effective date in section 18(2) of Act 43 of 2014 as substituted section 64(1) of Act 17 of 2023) and substituted by section 12(1)(w) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(12)

(a) The committee appointed in terms of subsection (11) must perform its function impartially and without fear, favour or prejudice.

(b) The committee may-

(i) appoint its own chairperson and determine the procedures for its meetings;

(ii) evaluate any application and make recommendations to the Minister of Higher Education, Science and Innovation for purposes of the approval of scientific or technological research and development approved under subsection (9);

(iii) investigate or cause to be investigated scientific or technological research and development approved under subsection (9);

(iv) monitor all scientific or technological research and development approved under subsection (9)—

(aa) to determine whether the objectives of this section are being achieved; and

(bb) to advise the Minister of Finance and Minister of Higher Education, Science and Innovation on any future proposed amendment or adjustment of this section;

(v) for a specific purpose and on the conditions and for the period as it may determine, obtain the assistance of any person to advise the committee relating to any function assigned to that committee in terms of this section; and

(vi) require any taxpayer applying for approval of scientific or technological research and development in terms of subsection (9), to furnish any information or documents necessary for the Minister of Higher Education, Science and Innovation and the committee to perform their functions in terms of this section.

[Subsection (12) substituted by section 1(1) of Act 25 of 2011 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023) and by section 12(1)(x) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(13) A taxpayer carrying on scientific or technological research and development approved under subsection (9) must report to the committee annually with respect to-

(a) the purposes of that scientific or technological research and development; and

(b) the extent to which that scientific or technological research and development requires specialised skills,

within 12 months after the close of each year of assessment, starting with the year following the year in which approval is granted under subsection (9) in the form and in the manner that the Minister of Higher Education, Science and Innovation may prescribe.

[Subsection (13) substituted by section 1(1) of Act 25 of 2011 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023), by section 29(1)(o) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and by section 12(1)(y) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(14) Notwithstanding Chapter 6 of the Tax Administration Act, the Commissioner may disclose to the Minister of Higher Education, Science and Innovation information in relation to scientific or technological research and development-

(a) as may be required by that Minister for the purposes of submitting a report to Parliament in terms of subsection (17);

(b) if that information is material in respect of the granting of approval under subsection (9) or a withdrawal of that approval in terms of subsection (10); and

[Subsection (14) substituted by section 1(1) of Act 25 of 2011 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023), by section 271 read with paragraph 34(a) of Schedule 1 of Act 28 of 2011, by section 29(1)(p) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and by section 12(1)(z) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(15) The members of the committee appointed in terms of subsection (11) and any person whose assistance has been obtained by that committee may not-

(a) act in any way that is inconsistent with the provisions of subsection (12)(a) or expose themselves to any situation involving the risk of a conflict between their responsibilities and private interests; or

(b) use their position or any information entrusted to them to enrich themselves or improperly benefit any other person.

[Subsection (15) substituted by section 1(1) of Act 25 of 2011 with effect from 1 October 2012 and applicable in respect of research and development on or after 1 October 2012 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023)]

(16) The Minister of Higher Education, Science and Innovation or the person appointed by the Minister of Higher Education, Science and Innovation contemplated in subsection (9) must—

(a) provide written reasons for any decision to grant or deny any application for approval of any scientific or technological research and development under subsection (9), or for any withdrawal of approval contemplated in subsection (10);

(b) inform the Commissioner of the approval of any scientific or technological research and development under subsection (9), setting out such particulars as are required by the Commissioner to determine the amount of the deduction in terms of subsection (2) or (4); and

(c) inform the Commissioner of any withdrawal of approval in terms of subsection (10) and of the date on which that withdrawal takes effect.

[Subsection (16) substituted by section 3(1)(a) of Act 9 of 2007, by section 1(1) of Act 25 of 2011 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023), amended by section 29(1)(q) and (r) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and substituted by section 12(1)(zA) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(17) The Minister of Higher Education, Science and Innovation must annually submit a report to Parliament advising Parliament of the direct benefits of the scientific or technological research and development in terms of economic growth, employment and other broader government objectives and the aggregate expenditure in respect of such activities without disclosing the identity of any person.

[Subsection (17) substituted by section 3(1)(a) of Act 9 of 2007, by section 1(1) of Act 25 of 2011 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023) and by section 12(1)(zB) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(18) Every employee of the Department of Science and Innovation, every member of the committee appointed in terms of subsection (11) and any person whose assistance has been obtained by that committee—

(a) must preserve and aid in preserving secrecy with regard to all matters that may come to their knowledge in the performance of their functions in terms of this section; and

(b) may not communicate any such matter to any person whatsoever other than to the taxpayer concerned or its legal representative, nor allow any such person to have access to any records in the possession or custody of the Department of Science and Innovation or committee except in terms of the law or an order of court.

[Subsection (18) added by section 3(1)(b) of Act 9 of 2007, substituted by section 1(1) of Act 25 of 2011 (effective date in section 1(2) of Act 25 of 2011 as substituted by section 35(1) of Act 21 of 2012, by section 34(1) of Act 20 of 2022 and by section 58(1) of Act 17 of 2023), amended by section 29(1)(s) of Act 31 of 2013 (effective date in section 29(2) of Act 31 of 2013 as substituted section 62(1) of Act 17 of 2023) and substituted by section 12(1)(zC) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(19) The Commissioner may, notwithstanding the provisions of sections 99(1) and 100 of the Tax Administration Act, raise an additional assessment for any year of assessment with respect to a deduction in respect of scientific or technological research and development which has been allowed, where approval has been withdrawn in terms of subsection (10).

[Subsection (19) added by section 271 read with paragraph 34(b) of Schedule 1 of Act 28 of 2011 and substituted by section 5(1) of Act 21 of 2012 (effective date in section 5(2) of Act 21 of 2012 as substituted by section 59(1) of Act 17 of 2023), by section 4(a) of Act 18 of 2023 and by section 12(1)(zD) of Act 17 of 2023(as substituted by section 66(1)(b) of Act 42 of 2024) effective on 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(20)

(a) A taxpayer may, notwithstanding the provisions of sections 93, 99(1) and 100 of the Tax Administration Act, apply to the Commissioner to allow all deductions provided for under this section in respect of scientific or technological research and development if-

(i) expenditure in respect of that scientific or technological research and development was incurred within six months prior to or on or after the date of receipt of an application by the Department of Science, Technology and Innovation for the approval of that scientific or technological research and development;

(ii) that expenditure was not allowable in respect of a year of assessment solely by reason of the absence of approval of that scientific or technological research and development under subsection (9); and

(iii) that scientific or technological research and development is approved in terms of subsection (9) after that year of assessment.

(b) The Commissioner may, notwithstanding the provisions of sections 93, 99(1) and 100 of the Tax Administration Act, make a reduced assessment for a year of assessment where expenditure incurred during that year in respect of scientific or technological research and development would have been allowable as a deduction in terms of this section had the approval in terms of subsection (9) been granted during that year of assessment.

[Subsection (20) added by section 27(1) of Act 15 of 2016(effective date in section 27(2) of Act 15 of 2016 as substituted by section 65(1) of Act 17 of 2023), amended by section 4(b) and (c) of Act 18 of 2023 and substituted by section 12(1)(zE) of Act 17 of 2023(as substituted by section 66(1)(b) of Act 42 of 2024) effective on 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(21) Any person who contravenes the provisions of subsection (18) is guilty of an offence and liable on conviction to a fine or to imprisonment for a period not exceeding two years.

[Subsection (21) added by section 12(1)(zF) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

(22) No deduction shall be allowed under this section in respect of applications received after 31 December 2033.

[Subsection (22) added by section 12(1)(zF) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]

[Section 11D inserted by section 13(1) of Act 20 of 2006 and amended by section 12(1)(a) of Act 17 of 2023 with effect from 1 January, 2024 and applicable in respect of applications received and expenditure incurred on or after that date]