In Part I of our 3-part series on Load Shedding Income Tax Incentives, we explained S12B in the context of these incentives. Whereas S12B relates to the assets used directly in the renewable process, S12U deals with capital allowances for supporting infrastructural investments.
- Assets used for the production of bio-diesel or bio-ethanol
- Assets used by a taxpayer for the purpose of his trade, in the generation of electricity from
- Wind power
- Solar energy:
- Photovoltaic solar energy of more than 1 megawatt
- Photovoltaic solar energy not exceeding 1 megawatt
- Concentrated solar energy
- Hydropower of not more than 30 megawatts
Whereas S12B provides for a write-off over three years, or one year in the case of photovoltaic solar energy not exceeding 1 megawatt, S12U presents a more aggressive approach, with a write-off in full in the year of expenditure.
To ensure your business qualifies for S12U relief, here’s what you need to know:
The write-off covers the cost of infrastructure to support qualifying renewable energy assets, more specifically:
- New roads and/or fencing.
- Improvements to roads and/or fencing.
- Any improvements to or cost of new foundations.
- Electricity production from the renewable energy investment cannot exceed 5 megawatts.
- Waterpower must be hydropower that does not produce more than 20 megawatts of electricity.
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