Research & Development Tax Allowance (R&D)

Research and Development (R&D): Section 11D of the Income Tax Act, Act 58 of 1962

  • A taxpayer will be allowed a deduction of 150% off any expenditure actually incurred for purposes of:
    • The discovery of novel, practical and non-obvious information of a scientific or technological nature; or
    • The devising, developing, or creating of any invention as defined in Section 1 of the Patents Act, 1978, any design as defined in Section 1 of the Designs Act, 1993, or any computer programme as defined in Section 1 of the Copyright Act, 1978, or other similar property of a scientific or technological nature.
  • A deduction will be allowed in respect of any building, machinery, plant, implement, utensil and article used for purposes as described above, equal to 50% of the cost of that building, etc. in the year of assessment that it is brought into use for the first time, 30% in the first succeeding year of assessment and 20% in the second succeeding year of assessment. If any building was used partly for those purposes and partly for other purposes in the same year of assessment, the allowance for that year is limited to the same proportion of the total capacity of the building used for the abovementioned purposes.

These benefits are claimable in a taxpayer's current year of assessment, as well as in respect of his previous two years of assessment.

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