Scientific and Technological Research and Development Tax Incentive in South Africa
Companies undertaking scientific and technological research and development (R&D) in South Africa can qualify for a 150% tax deduction for operational R&D expenditure in terms of section 11D of the Income Tax Act.This incentive is available to businesses of all sizes and in all sectors of the economy as long as they are registered in South Africa. To qualify for the deduction, the R&D activities against which the expenditure is incurred must be approved by the Minister of Science and Technology.
The incentive is aimed at encouraging businesses to invest in R&D in South Africa. The objective is to help companies build capabilities and innovations by creating new products, processes, devices and techniques, and/or significantly improving existing ones. This incentive is part of a package of measures that the government of South Africa has introduced to support R&D-led innovation, industrial development and employment creation.
The Taxation Laws Amendment Acts in 2011 and 2013 introduced enhancements to the existing R&D tax incentive provided in terms of section 11D of the Income Tax Act, clarifying the intentions of the incentive and introducing a pre-approval process for R&D activities undertaken after 1 October 2012, as opposed to the retrospective submission of information for R&D undertaken before this date.
To access the incentive, a company must complete an application form (www.dst.gov.za/r-d) and submit it to the Department of Science and Technology (DST), which is responsible for the administration of the process. DST officials can provide information and assistance regarding completing the application form. Read more.
It is important to submit the application before starting to conduct the R&D in question because only expenditure incurred on or after the date on which the DST receives the application will be considered for the incentive.
For more information, please contact Ms Dimakatso Mokone at +27 12 843 6560 /
1.R&D tax incentive documentation (for applications from 01 October 2012 onwards)
2. R&D Tax Incentive Documentation (2006 - 30 Sept 2012)
3. Reports to Parliament
3. Other Document