Research and Development – introduction

As from 2 November 2006, the following deductions is allowed for expenditure
incurred in respect of qualifying research and development:
Prior to 1 October 2012
• 150% of operating research and development costs in respect of activities undertaken in South Africa for the purposes of the discovery of novel,
practical and non-obvious information; or devising, developing or creating any invention, design or computer program as defined in the relevant acts; or knowledge essential to the use of such research property
• Research and development capital costs (including any building or part thereof, machinery, plant, implements, utensil or article or improvements thereto of a capital nature) are written off on a 50:30:20 basis.
As from 1 October 2012
• 100% automatic deduction of expenditure incurred solely and directly in respect of separately identifiable research and development activities
• 50% additional deduction of expenditure incurred solely and directly in respect of separately identifiable research and development activities.
This deduction is subject to pre-approval by the Department of Science and Technology
• Research and development capital assets are written off as follows:
– Machinery, plant, utensils or articles on a 40:20:20:20 basis
– Buildings or improvements 5% per year.

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