Capital Incentive Allowances | South Africa Tax Guide 2006
|
|
| Asset Type | Conditions for Accelerated Allowance | Accelerated Allowance Percentage | Conditions for Annual Allowances | Annual Allowance |
| Industrial Buildings | Not applicable for buildings brought into use or improvements completed after 31 December 1989 | Previously 17.5% | Cost of erection of buildings or improvements, provided building is used wholly or mainly for carrying on a process of manufacture or similar process | 5% With effect from 1/7/96 -10% |
| Hotel Buildings | Not applicable for buildings brought into use or improvements completed after 4 June 1988 | Previously investment allowance of 10% | Cost of portion of erection or improvements, provided registered as a hotel | 5% |
| Residential Buildings | Cost of buildings erected (Project must consist of at least five
family units) intended for letting or occupation by a bona fide full -
time employee Erection commenced on or after 1 April 1982 |
10% | Same conditions as for accelerated allowance | 2% |
| Benefication Process | 35% value is added to raw material or any intermediate product (See
Note 8 & 9 ) At least 60% processed products are exported The processed output is internationally competitive |
See Plant & Machinery and Industrial Buildings | Commence write down & deduct interest & finance charges in the year in which expenses are incurred ( See note 8) | See Plant & Machinery & Ind. bldings |
| Aircraft | Cost of aircraft used for transporting persons, livestock, goods or
mail for reward Must first be registered in the RSA |
Nil | Must be used for purposes of trade | 20% |
| Ships | Cost of ship used for prospecting, mining or as a foreign - going
ship Must be a South African registered ship |
Nil | Must be used for purposes of trade | 20% |
| Plant & Machinery | Not applicable (See Notes 5 and 10) | Nil | Cash cost of plant & machinery purchased under an agreement formally signed by all parties on or after 15 December 1989 | 20% 33.33% on all new & unused plant & machinery acquired on or after 1 July 1996 to 30 Sep 1999 |
| Hotel Equipment | Not applicable (See Note 6) | Nil | Cash cost of machinery, implements, utensils or articles purchased under an agreement formally signed by all parties on or after 16 December 1989 | 20% |