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: 20 Nov 2015 | Removal date: open ended
Still in force

Tax or social insurance relief

On 20 November 2015, the Department of Trade and Industry (DTI) of South Africa issued Notice 1157 announcing the approval of an application made by Naledi Forging (Pty) Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the local steel and iron products manufacturer which is deductible from taxable income is ZAR 900 million (circa USD 64.6 million), and the training allowance is ZAR 1.9 million (USD 136,000).

The DTI has stated that the manufacturing qualifying assets accounted for the company's total investments estimated at ZAR 1,710.7 million (USD 122.7 million), and due to the specific characteristics of the project, the DTI classified this investment as a Brownfield project.

The purpose of the investment is to manufacture train locomotive and wagon wheels.

 
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

495 Railway & tramway locomotives & rolling stock; parts
8607 Parts of railway or tramway locomotives or rollingstock.
860729 Other
860791 Of locomotives
860799 Other

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