ANNOUNCED AS TEMPORARYNo
Tax or social insurance relief
On 13 July 2011, the Department of Trade and Industry (DTI) of South Africa issued Notice 482 announcing the approval of an application made by Rainbow Nation Renewable Fuels Ltd for the 12I Tax Allowance Programme. As a result, the investment allowance granted to the multinational company which is deductible from taxable income is circa ZAR 900 million (circa USD 131.9 million), and the training allowance is ZAR 4.7 million (circa USD 689,000). The Ministry estimates the foregone revenue to be ZAR 253,310,400 (USD 37 million).
The DTI has stated that from the company's total investments estimated at ZAR 2,083 million (USD 305 million), the manufacturing qualifying assets accounted for circa ZAR 1,743.9 million (USD 255.5 million).
The purpose of the investment is to manufacture soybean meal, biodiesel, and Glycenne.
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.
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