The South African Revenue Service has released the Taxation Laws Amendment Act 2024 which introduces a new investment allowance for automotive companies investing in the production capacity for electric and hydrogen-powered vehicles in the country.
This measure allows businesses to deduct 150% of the cost for assets primarily used in the production of these vehicles, including buildings (and their improvements), new and unused machinery, equipment, and any upgrades made to existing machinery or plant.
The introduction of this incentive follows the announcement made by the Finance Minister in the 2024 Budget Speech, where he allocated ZAR 964 million over three years to support South Africa’s shift towards electric vehicles (EVs).
The Act was gazetted on 24 December 2024. The incentive will apply to all qualifying equipment and buildings, including any additions or improvements, that are put into use for the first time between 1 March 2026 and 1 March 2036.
