The South African Revenue Service (SARS) initiated a consultation on 5 July, 2024, regarding a draft guide aimed at clarifying income tax advantages available to qualifying companies in special economic zones (SEZs), as defined by Sections 12R and 12S of the Income Tax Act.
The consultation is set to conclude on 30 August, 2024. Comments can be submitted via email to policycomments@sars.gov.za.
The guide defines the criteria for a “qualifying company” eligible for the SEZ tax benefits, as well as a list of disqualifying business activities.
It offers comprehensive insights into various aspects SEZs including overview of SEZs, different categories they fall into, eligible types of businesses and services that can operate within SEZs, procedures for applying to designate an area as an SEZ, incentives available within SEZs, deductions applicable to buildings located therein, and the interplay between agricultural provisions outlined in the First Schedule of the Income Tax Act and SEZ regulations.
Qualifying companies in SEZs can access various tax incentives, including a 15% reduced corporate income tax rate, VAT relief, employment tax incentives, additional investment allowances, and accelerated building allowances.
