Can a taxpayer using solar panels for trade purposes get the s12B deduction?
15 April 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: A corporate
client purchased solar panels to generate their own electricity to use in their
As per Section 12B(h) in the Income Tax Act you can have a
50:30:20 deduction if you generate electricity for the purpose of trade. I just
want to confirm if there is any other requirements that they need to comply
with to get the deduction?
A: The only
requirements in section 12B(1)(h) are that the item (machinery, plant,
implement, utensil or article) must be:
owned by the taxpayer or acquired by the
taxpayer as purchaser in terms of an agreement contemplated in paragraph (a) of
the definition of ‘instalment credit agreement’ in section 1(1) of the
Value-Added Tax Act;
brought into use for the first time by that
taxpayer for the purpose of his or her trade
used by that taxpayer in the generation of
electricity from solar energy.
There are no other requirements as there are for section 12L
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.