Amendments to the Carbon Offset Regulations
On the 8th of July 2021, National Treasury gazetted amendments to the regulations governing carbon offsets under the South African Carbon Tax. The main changes are summarised below –
a. Carbon Offsets and Section 12L
Previously, the regulations created some confusion as to whether a taxpayer could claim both section 12L and the carbon offset allowance. The amendments clarify that a taxpayer can claim both, but not for the same project.
The wording has been amended to state that a taxpayer may not receive an offset allowance for a project for which any section 12L allowance has been received.
This is good news for taxpayers. It means that taxpayers can legally make use of section 12L and the carbon offset allowance. They just need to make sure that the two are not claimed on the same project.
For offset projects that became subject to the carbon tax when it was introduced, the amendments clarify that a carbon offset in respect of an approved project in existence prior to 1 June 2019 can be used in Phase 1 of the carbon tax. It states that these carbon offsets need to be used on or before 28 July 2023 which is the deadline for the submission of the 1 January to 31 December 2022 carbon tax account to the South African Revenue Service (SARS).
For further information or if you are interested in discussing these opportunities, please feel free to contacting either Joslin Lydall or Josh Bersiks from Catalyst Solutions.
+27 84 299 6873
+27 82 842 7310