R & D Incentives South Africa

R & D Tax Incentive

Through the Department of Science and Technology, the South African government offers a super charged tax deduction of 150% on all qualifying R&D. This benefit translates to a 14% after tax benefit.

Cash Incentives

The South African government, through the DTI, supports the development of new technologies through several programmes including the Support Program for Industrial Innovation (SPII). Qualifying projects include development of new products or software development across multiple industries.

In 2007, the South African Government amended the Income Tax Act to include an incentive for companies conducting R&D. The Act allows for a supercharged tax deduction of 150% on qualifying operational R&D expenditure. R&D is not limited to work being done in a laboratory. Examples of qualifying activities include product or process development, innovative significant improvements, scientific or technological designs, patentable work, activities involving testing and trial work or software development. In order to qualify for the incentive, the R&D must be done in South Africa and qualifying expenditure can include salaries, overheads, materials and contractor costs.

Section 11D of the Act has been amended a number of times since its inception. One of the major changes is that companies now have to pre-approve R&D activities in order to qualify for the tax incentive. The Act still provides very little guidance on the various issues surrounding the incentive. This together with the ‘teething problems’ experienced in the implementation of the pre-approval process means that experience in claiming the incentive, the understanding of applicable legislation and insight into the industry is a tremendous advantage when attempting to claim the 11D tax incentive.  Keep an eye on our Insights page for news of the new incentive requirements.

If you feel that you are doing R&D and require assistance in claiming the R & D tax incentive, or would like more information about the incentive please feel free to contact us for personalised and exceptional service.

Cash Incentives

The South African government, through the Department of Trade and Industry supports the development of new technologies through several programmes including the Support Program for Industrial Innovation (SPII).

The SPII program can provide your company with cash grants of up to R5 million for projects that demonstrate innovation and commercial viability. There are a number of schemes within SPII and various factors are used to determine which scheme and incentive is applicable for your project.

Qualifying projects include development of new products or software development across multiple industries. Whether you are developing new technologies in an SMME, Medium or Large company, contact us to discuss potential available R&D grants.

How Can Catalyst Help You With An R & D Tax Incentive?

A number of incentives are available to help you maximize the return on investment in R&D. These incentives are not necessarily mutually exclusive. We will work with you to identify which incentive is the most appropriate for your unique situation.

Would you like to know how we can help you? Contact us today.