Solar Tax Incentive

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silkman

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Can someone please explain how this incentive works? If someone has a taxable income of R500 000 as a self employed person, and the solar quote is say R150 000. What will be the cost saving to the person? It's very confusing.
Thanks
 
silkman said:
Can someone please explain how this incentive works? If someone has a taxable income of R500 000 as a self employed person, and the solar quote is say R150 000. What will be the cost saving to the person? It's very confusing.
Thanks
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its easy you pay tax on your profit.

500k - 150k is 350k this is what you pay tax on.

Be ready to defend the position if you make this claim

The solar claim is interesting in the sense you get 100% in one year, very beneficial from a capital claim.

Just bear in mind that if you sell it SARS will make you pay the recoupment of its useful life.
 
silkman said:
Can someone please explain how this incentive works? If someone has a taxable income of R500 000 as a self employed person, and the solar quote is say R150 000. What will be the cost saving to the person? It's very confusing.
Thanks
Click to expand...
Only the portion related to the panels is tax deductible.

No labour, no batteries, no wires, no fittings.
 
Grubscrew said:
Can individuals claim section 12b?
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I did got it approved last year. Bear in mind I have a very special case and built a rock solid argument...

Do loads of trading and mining for crypto so sars get a nice cut every year and I got mine last year :)
 
It is for a business.- working from home. So what's the bottom line in the case I mentioned?
 
silkman said:
It is for a business.- working from home. So what's the bottom line in the case I mentioned?
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Speak to a tax consultant. you need to have a rock solid case for "home" mine is like that.

The mining trading ops are running 24/7 its a little difficult to argue if its not 24/7 then you need to apportion etc. You can attempt it but prep for worst case scenario
 
Thanks. What's the best case scenario if they approve it based on the R500k taxable income. How does it work? To you pay tax on 500k - (150000 x125% rebate =187500) =312 500. So u pay tax on 312500 instead of 500?
 
silkman said:
Thanks. What's the best case scenario if they approve it based on the R500k taxable income. How does it work? To you pay tax on 500k - (150000 x125% rebate =187500) =312 500. So u pay tax on 312500 instead of 500?
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100% deduction as per my post above only companies get 125% otherwise its 100%

500k - 150k so you pay tax at your rate on 350k
 
Snyper564 said:
Speak to a tax consultant. you need to have a rock solid case for "home" mine is like that.

The mining trading ops are running 24/7 its a little difficult to argue if its not 24/7 then you need to apportion etc. You can attempt it but prep for worst case scenario
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My accountant has amortized mine over 5 years IIRC.
 
lkpat said:
But it's one or the other, right?
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Actually no....

If you did the claim correctly for tax purposes you want to write it off in one shot not 5 years. That's the benefit of 12B accelerated write off.

Outside of that they might have gone the 11e route and then it's under the interpretation note guidance of how long to write it off. But it's not beneficial over 5.i mean it is but it's less so.

The accounting vs tax timing misalignment causes temporary differences for tax/acc purposes.
 
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