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Boost the economy with Reaserch and Develpment and get every cent back from SARS!

by , 31 January 2013
Businesses are hesitant to undertake research and development (R&D) as it tends to cost a small fortune in time and money. But you should get your company involved. Especially since SARS offers you a 100% R&D deduction tax incentive. This is a much higher percentage than the tax incentive offered in America, where R&D is said to 'pave the future'. So what are you waiting for? Get involved in R&D to boost knowledge your industry, aid the economy, and get the money back from SARS!

R&D could cost you a small fortune, especially if you discover your project isn't feasible and you won't make any money off it. 'But it's not all doom and gloom. There could still be a tax lifeline of a 100% tax deduction,' according to the Tax Bulletin.
And there's a further tax incentive if you're involved in R&D!

But that's not all, an additional 50% uplift has been added for research and development expenditure by the minister.

In America, research and development tax credits are said to 'pave the future' as stated on the AGBeats website, even though a much lower percentage is paid for them.
But South Africa spends just 0.92% of its R3.6-trillion gross domestic product (GDP) on research and development. That's less than developed countries and our emerging-market partners.

That's why the research and development tax incentives are seen as a way of to attract foreign companies to undertake research in South Africa.
They're also a great way to encourage firms to undertake more research and development.

But your research and development will have to meet the following four requirements to qualify for a tax deduction from SARS:
  1. Your trade activities must take place within South Africa;
  2. Your R&D must be carried out by someone in your company, who chooses which method of research to use;
  3. The information, invention, design, computer programme or knowledge must be of a scientific or technological nature and intended for use in the production of your income; and
  4. You must carry on using the asset. You'll lose the right to claim a tax deduction for R&D expenditure if you only use the asset in R&D.  
  5. If your R&D meets all the requirements above, you can claim a 100% R&D tax deduction from SARS.

For a detailed explanation on more tax deductions,  get your hands on our FSP Business Practical Tax Loose Leaf.

In the Practical Tax Loose Leaf we've got a dedicated chapter on tax deductions, in this chapter you'll discover...
  • Salary earners can claim these 13 deductions
  • Checklist: When you CAN claim a home office deduction
  • Tax-free reimbursement of your business expenses
  • Stand up to SARS

Get your copy of the Practical Tax Loose Leaf  today!


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