SOLAR TAX BENIFITS 

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Combatting Load-Shedding through SARS Tax Incentives

 

In the advent of unprecedented stages of load-shedding, most businesses and households have resorted to alternative sources of power for their day-to-day requirements. Given the astronomical initial capital investment in either Renewable or Non-Renewable sources of energy, it would be prudent to afford tax experts like

MaxProf the opportunity to assist you in maximising on all the tax incentives meant to cushion business from this crisis.
Accelerated Depreciation Allowance

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As from 1 March 2023, Section 12B of the of the Income Tax Act, allows individuals and companies to claim a 125% depreciation allowance on the cost and installation of any renewable energy. This means the taxpayer will save up to 27% of their initial cost of their power source through a reduction of their taxable income.

Should the company have made a loss, the tax benefit can be carried over to the next financial year as a deferred tax asset.

A company procures a Solar System for R 230,000 (VAT inclusive);
as from 1 March 2023, they are entitled to the following:
 

 

• 15% input VAT = R 30,000 (provided they are registered for VAT)
   

• Tax deduction of 125% = R 250,000
   

• Income tax saving of R 67,500

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Solar Panel Incentive for Individuals

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This incentive allows individuals to claim a rebate to the value of 25% of new and unused solar photovoltaic panels, up to a maximum of R 15,000.

If a taxpayer purchases 15 solar panels at R 3,000 each (total cost R 45,000), they would be able to claim 25% of the cost, which is R 11,250. If the taxpayer had purchased 25 panels (total cost R 75,000) their claim would be limited to R 15,000.