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: 29 Apr 2016 | Removal date: open ended
Still in force

Tax or social insurance relief

On 29 April 2016, the Department of Trade and Industry (DTI) of South Africa issued Notice 488 announcing the approval of an application made by Clover SA (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the local foods and beverages manufacturer which is deductible from taxable income is circa ZAR 599 million (USD 42 million), and the training allowance is ZAR 15.4 million (USD 1 million).

The DTI has stated that the manufacturing qualifying assets accounted for the company's total investments estimated at ZAR 1,088.5 million (USD 76 million), and 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 dairy products.

 
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

222 Other dairy products
0405 Butter and other fats and oils derived from milk; dairy spreads.
040510 Butter
040590 Other
0406 Cheese and curd.
040620 Grated or powdered cheese, of all kinds
040630 Processed cheese, not grated or powdered
040690 Other cheese

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