Tax Alert
Energy Efficiency Savings Incentive comes into operation
Section 12L of the Income Tax Act (ITA) provides for a tax allowance for energy efficiency savings. It was originally inserted in 2009 and substituted in 2012, but remained ineffective until a notice bringing it into effect was published and the accompanying regulations issued, both which have now been done.
As part of Government’s efforts to promote energy efficiency savings, section 12L of the ITA was inserted to provide an income tax deduction to qualifying taxpayers. This tax incentive provides for an income tax deduction equal to 45c for each kilowatt hour (or equivalent) saved by the taxpayer during the relevant year of assessment against a baseline from the beginning of the year.
In order to obtain the deduction, a taxpayer must register with the South African National Energy Development Institute (SANEDI), appoint a measurement and verification professional to report the energy efficiency savings, submit the report to SANEDI and submit the certificate issued by SANEDI to SARS with the claim of the deduction.
On 8 November 2013 the Minister of Finance issued a notice that section 12L came into operation on 1 November 2013. It is not entirely clear, but presumably the deduction will be available for years of assessment ending on or after that date.This Tax Alert is provided by PricewaterhouseCoopers Tax Services (Pty) Ltd for information only, and does not constitute the provision of professional advice of any kind. The information provided herein should not be used as a substitute for consultation with professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided wi th all the pertinent facts relevant to your particular situation. No responsibility for loss occasioned to any person acting or refraining from acting as a result of using the information in the Tax Alert can be accepted by PricewaterhouseCoopers Tax Services (Pty) Ltd, PricewaterhouseCoopers Inc or any of the directors, partners, employees, sub-contractors or agents of PricewaterhouseCoopers Tax Services (Pty) Ltd, PricewaterhouseCoopers Inc or any other PwC entity.
© 2013 PricewaterhouseCoopers (“PwC”), a South African firm, PwC is part of the PricewaterhouseCoopers International Limited (“PwCIL”) network that consists of separate and independent legal entities that do not act as agents of PwCIL or any other member firm, nor is PwCIL or the separate firms responsible or liable for the acts or omissions of each other in any way. No portion of this document may be reproduced by any process without the written permission of PwC.
Johannesburg
Kyle Mandy 011-797-4977
kyle.mandy@za.pwc.com
Pretoria
Gert Meiring 012-797-5506
gert.meiring@za.pwc.com
Cape Town
Leon Swanepoel 021-529-2376
leon.swanepoel@za.pwc.comDurban
Jerry Maharaj 031- 271 2028
jerry.maharaj@za.pwc.com
Port Elizabeth
Ian Olls 041-391-4474
ian.olls@za.pwc.com
East London
Susan Minnie 043 707 9600
susan.minnie@za.pwc.com
Bloemfontein
Gert Nel 051-503-4222
gert.nel@za.pwc.com
Energy Efficiency Savings Incentive comes into operation
Section 12L of the Income Tax Act (ITA) provides for a tax allowance for energy efficiency savings. It was originally inserted in 2009 and substituted in 2012, but remained ineffective until a notice bringing it into effect was published and the accompanying regulations issued, both which have now been done.
As part of Government’s efforts to promote energy efficiency savings, section 12L of the ITA was inserted to provide an income tax deduction to qualifying taxpayers. This tax incentive provides for an income tax deduction equal to 45c for each kilowatt hour (or equivalent) saved by the taxpayer during the relevant year of assessment against a baseline from the beginning of the year.
In order to obtain the deduction, a taxpayer must register with the South African National Energy Development Institute (SANEDI), appoint a measurement and verification professional to report the energy efficiency savings, submit the report to SANEDI and submit the certificate issued by SANEDI to SARS with the claim of the deduction.
On 8 November 2013 the Minister of Finance issued a notice that section 12L came into operation on 1 November 2013. It is not entirely clear, but presumably the deduction will be available for years of assessment ending on or after that date.This Tax Alert is provided by PricewaterhouseCoopers Tax Services (Pty) Ltd for information only, and does not constitute the provision of professional advice of any kind. The information provided herein should not be used as a substitute for consultation with professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided wi th all the pertinent facts relevant to your particular situation. No responsibility for loss occasioned to any person acting or refraining from acting as a result of using the information in the Tax Alert can be accepted by PricewaterhouseCoopers Tax Services (Pty) Ltd, PricewaterhouseCoopers Inc or any of the directors, partners, employees, sub-contractors or agents of PricewaterhouseCoopers Tax Services (Pty) Ltd, PricewaterhouseCoopers Inc or any other PwC entity.
© 2013 PricewaterhouseCoopers (“PwC”), a South African firm, PwC is part of the PricewaterhouseCoopers International Limited (“PwCIL”) network that consists of separate and independent legal entities that do not act as agents of PwCIL or any other member firm, nor is PwCIL or the separate firms responsible or liable for the acts or omissions of each other in any way. No portion of this document may be reproduced by any process without the written permission of PwC.
Johannesburg
Kyle Mandy 011-797-4977
kyle.mandy@za.pwc.com
Pretoria
Gert Meiring 012-797-5506
gert.meiring@za.pwc.com
Cape Town
Leon Swanepoel 021-529-2376
leon.swanepoel@za.pwc.comDurban
Jerry Maharaj 031- 271 2028
jerry.maharaj@za.pwc.com
Port Elizabeth
Ian Olls 041-391-4474
ian.olls@za.pwc.com
East London
Susan Minnie 043 707 9600
susan.minnie@za.pwc.com
Bloemfontein
Gert Nel 051-503-4222
gert.nel@za.pwc.com
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