Gauteng Business 2016 edition

Incentives
SPECIAL FEATURE
As with any growing economy, business incentives are a vital component to getting new
projects off the ground, especially during tough economic times. Discover which sectors
are most suitable when perusing incentives in Gauteng, a province that prides itself on
facilitating development.
It must be noted firstly that the South African Government is giving
consideration to expanding incentives for labour-intensive projects
undertaken within IDZs to stimulate job creation, making that a
prime area of investment.
Urban Development Allowances
For the construction of buildings, investors and firms can benefit from
deductible allowances of up to 20 percent of the costs incurred in
the development of new buildings or the refurbishment of existing
buildings in designated urban development zones.
Infrastructure Development
In the case of infrastructure investments, a tax deduction of assets
owned for the erection of pipelines, transmission lines and railway lines
is available to encourage investment in local infrastructure.
Public Private Partnerships
Tax exemptions are provided for qualifying government grants that are
utilised for the improvement of state-owned property. The objective
of these exemptions is to encourage the private sector to invest in
infrastructure in partnership with the public sector.
Tax Incentives
Preferential Corporate Tax Rate for Small Business Corporations Small
and medium enterprises (SMEs) whose gross annual income does
not exceed R14-million, are eligible for income tax deductions. The
tax rates applicable to qualifying enterprises vary depending on their
level of income.
Research and
Development
Tax deductions of up to 150 percent
are available for operational
expenditure incurred during the
discovery of new information, as
well as in developing, designing
and inventing programmes of a
scientific or technological nature.
Depreciation Allowances
In the case of commercial buildings,
a depreciation of 5 percent
per annum is allowed on new or
unused buildings, as well as for
improvements used in the production
of income. To qualify for
the depreciation allowance, the
building must be owned by a
taxpayer.
Rolling Stock Depreciation
Tax deductions of 20 percent per
annum are available for costs incurred
in respect of rolling stock
(trains, carriages and similar transportation
modes) brought into
use on or after 1 January 2008.
The principal objective of allowable
deductions on expenditure
on rolling stock is to encourage
43 GAUTENG BUSINESS 2016