South Africa: Future of R&D tax incentive is being evaluated, discussion paper
A discussion paper on the future of the section 11D—the research and development (R&D) tax incentive
Future of R&D tax incentive is being evaluated, discussion paper
The National Treasury on 17 December 2021 released a discussion paper on the future of the section 11D—the research and development (R&D) tax incentive. Comments are due by 25 January 2022.
Read the discussion paper—“Reviewing the design, implementation and impact of South Africa’s research and development tax incentive”—on the National Treasury website.
In the 2021 budget review, the government proposed to limit, or let lapse, incentives that either erode the equity of the tax system or do not meet their intended objectives. Concerning the R&D tax incentive (which allows a taxpayer a 150% tax deduction of qualifying R&D expenditure), the government has undertaken an extensive exercise to assess the value and impact of this incentive. This exercise includes an impact evaluation by the World Bank (for objectivity); an internal synthesis analysis by the Department of Science and Innovation and, as part of the recently released discussion paper, an online survey whereby the public can provide input into the evaluation of the future of the R&D tax incentive.
The objective of the discussion paper and online survey is to evaluate whether the incentive is to continue beyond the current end date of 30 September 2022 and, if it continues, whether the current design is still suitable.
A media release notes that further announcements regarding the R&D tax incentive will be made in the 2022 budget speech.
Read a January 2022 report [PDF 637 KB] prepared by the KPMG member firm in South Africa
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