South Africa: Ten-year extension of R&D tax incentive announced

The Minister of Finance announced that the R&D tax incentive will be extended for another 10 years until 31 December 2033.

South Africa announced a 10-year extension of the R&D tax incentive

The Minister of Finance announced on 22 February 2023 that the section 11D research and development (R&D) tax incentive, providing for a 150% deduction for qualifying expenditure on eligible scientific or technological R&D undertaken by companies in South Africa, will be extended for another 10 years until 31 December 2033.

In addition, the following changes to the incentive were announced:

  • A grace period will be introduced to allow taxpayers to claim qualifying expenditure incurred up to six months before the required application to the Department of Science and Innovation (DSI) is submitted. Previously only expenses incurred from the date of submission of the application could be claimed.
  • The definition of R&D will be simplified to enable easier administration by the DSI and clear understanding by the taxpayer.
  • The prohibition on R&D related to internal business processes will be deleted, such that innovations intended for sale or for use by connected parties or even internally may qualify.

Read a March 2023 report [PDF 258 KB] prepared by the KPMG member firm in South Africa


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