FINANCIAL FITNESS – SARS AND TAX BREAKS BY JESSIE TAYLOR
Incentivising renewable energy through tax breaks
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s the South African government tackles the energy crisis, National Treasury has announced two key tax incentives to encourage individuals and businesses to assist with energy generation. Finance Minister Enoch Godongwana recently announced tax incentives for individuals who install solar rooftop panels at their homes, as well as a tax break for businesses that invest in renewable energy. Through these two incentives, the Treasury said it would be offering R4 billion in relief provided for individuals that install solar panels and R5 billion to companies through an expansion of the renewable energy tax incentive. President Cyril Ramaphosa announced in his recent State of the Nation Address that incentives to encourage individuals and businesses to invest in solar energy generation have become a priority, as they offer one means of reducing the impact of load shedding on households and the economy. Tax relief for individuals Individuals who install rooftop solar panels during this tax year will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000 per person. This can be used to
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reduce their tax liability in the 2023/24 tax year. This incentive aims to encourage homeowners to contribute to electricity generation by allowing them to claim the rebate against their personal income tax liability. THE FOLLOWING CONDITIONS APPLY: • The rebate applies only to new and unused solar PV panels with a minimum capacity of 275W per panel (design output), installed as part of a new system or as an extension of an existing system. • The solar panels must be installed at a private residence and have a certificate of electrical compliance issued. • The rebate only applies to solar PV panels, not other forms of power generation like inverters or generators. • To claim the incentive, individuals must present a VAT invoice and proof of payment to SARS, as well as the Certificate of Compliance. • The rebate will only be claimable on submission of the ITR12 annual returns for individuals. • The rebate is available to the person who pays for the system, so it is not confined to property owners. However, body corporates do not qualify.
