IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
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Inception date: 15 Jul 2016 | Removal date: open ended
Still in force

Tax or social insurance relief

On 15 July 2016, the Department of Trade and Industry (DTI) of South Africa issued Notice 428 announcing the approval of an application made by Omnia Group (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the local chemicals group which is deductible from taxable income is ZAR 246.5 million (USD 17 million), and the training allowance is circa ZAR 2 million (USD 139,000).

The DTI has stated that from the company's total investments estimated at circa ZAR 721 million (USD 50 million), the manufacturing qualifying assets accounted for ZAR 704 million (USD 49 million). Due to the specific characteristics of the project, the DTI classified this investment as a Greenfield project.

The purpose of the investment is to manufacture liquid calcium nitrate fertilizer.


Section 12I Tax Allowance Incentive
The 12I Tax Incentive seeks to promote Greenfield and Brownfield investments with the objective to boost the productivity of the South African manufacturing sector and increase the productivity of the human capital.
 
The minimum investment required in qualifying assets is ZAR 50 million for a greenfield project (projects that use only new and unused manufacturing assets) and an additional investment of ZAR 30 million for a brownfield project (expansions or upgrades of existing industrial complexes). 
 
The total investment allowance range between 35% and 55% (or ZAR 350 million and ZAR 900 million) depending on the type of the investment, the status classification, and the localization.

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

346 Fertilizers & pesticides
3102 Mineral or chemical fertilisers, nitrogenous.
310260 Double salts and mixtures of calcium nitrate and ammonium nitrate

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