National Treasury has published a document clarifying proposals for temporarily enhancing the renewable energy tax incentive for businesses in clause 16 of the Income Tax Amendment Bill now before Parliament.
Clause 16 provides for ‘enhanced deduction in respect of certain machinery, plant, implements, utensils and articles used in (the) production of renewable energy’.
According to the National Treasury document, once in force this provision will enable eligible businesses to claim against their taxable income ‘an upfront deduction of 125% of the cost incurred to acquire qualifying assets used in the generation of electricity, including supporting structures’.
Eligibility criteria listed in the document include the types of renewable assets to which the incentive will apply over a period of two years. This period will be deemed to have commenced retrospectively on 1 March 2023 and is expected to end on 28 February 2025.
Published by SA Legal Academy Policy Watch