Private Grant Funding Taxable?

[Density49]

Hi

I am a university student with a small business that recently received grant funding (+R100 000) from my bursar (a private company) following good performance in a pitching competition hosted by the said bursar and their partners. The grant does not require me to part ways with equity or give anything in return to the bursar. There are no commitments apart from sending them biannual reports on fund expenditure. The grant also doesn't specifically mention what the funds are to be used for. I have used them so far to buy some equipment, raw materials and other company expenses to help keep the business going. I have only used a small portion of the funds so far and want to find out if the remaining amount is taxable?

I had two separate tax consultation sessions, one of which stated the grant is not taxable, whereas the other consultant stated it is in fact taxable. Perhaps the first consultant failed to appreciate that it was not a government grant (which I've read are not taxable?).
I am in the process of getting further consultation and assistance with my business tax submission, but wanted to have some supporting feedback from the community.

Thank you

 

[retromodcoza]

Grant funding should be the same as any other funding and is booked under owners equity. It appears on the balance sheet , it isn't revenue, and therefore not taxable. I got both private and public grant funding for a business I ran some time back.

Of interest to you might be that you can claim 150% of the tax you would pay on any income of the business when you spend it on R&D , which it sound like you have been doing.

Research and Development Incentive

 

[Density49]

Grant funding should be the same as any other funding and is booked under owners equity. It appears on the balance sheet , it isn't revenue, and therefore not taxable. I got both private and public grant funding for a business I ran some time back.

Of interest to you might be that you can claim 150% of the tax you would pay on any income of the business when you spend it on R&D , which it sound like you have been doing.

Research and Development Incentive

Thank you for the response. This makes sense
I will discuss it further with the consultants. Thank you