For Commercial, Industrial & Agricultural Companies: Entities seeking to adopt solar energy through installations.
https://www.youtube.com/watch?v=4ckgWCXipbk
Elevate Your Bottom Line with Tax 12B Solar Incentives!
ending February 2025
for COMMERCIAL, INDUSTRIAL & CORPORATE ENERGY CONSUMERS
Who can benefit
Are you an industrial or commercial entity in South Africa looking to reduce your tax burden while embracing sustainable energy solutions? Look no further! Tax S12B offers a compelling incentive for businesses like yours to invest in renewable or solar installations. By leveraging this incentive, you not only contribute to a greener future but also bolster your financial health by slashing your tax liabilities.
The expanded Section 12B tax incentive currently provides for a 125% deduction through means of depreciation from taxable income in year 1 for projects completed and operational by end February 2025. Accounting for scoping, design and implementation timelines, to take advantage of this opportunity initial requirement discussions should take place before the end of June 2024.
EXAMPLE: TAX S12B Solar incentive calculation
Let’s consider a hypothetical scenario where a South African industrial or commercial company invests R15 million in a solar installation and how they can utilize the Tax S12B incentive through means of depreciation to their advantage.
Assumptions:
- The company invests R15 million in a solar installation.
- The company’s tax rate is 27%.
- The solar installation qualifies for the Tax S12B incentive, allowing for accelerated depreciation at 125%.
Tax Example:
Tax Deduction = Depreciated Amount x Tax Rate = R18.75 million x 27% = R5.062 million
Tax Savings = Tax Deduction = R5.062 million
Net Cost = Initial Investment – Tax Savings = R15 million – R5.062 million = R9.9375 million
In this example, the Company effectively reduces its net cost for the solar installation to R9.9375 million.
Attractive Tax Incentive
A deduction of 125% is a substantial tax break, significantly reducing the investor’s taxable income.
Support Green Energy
Investments support the growth of sustainable energy, reducing reliance on fossil fuels and aiding environmental conservation.
Meet the Team
with decades of success in project management and execution in solar and green energy
