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S 12I regs INCOME TAX ACT: REGULATIONS ANd NOTICES
6 Green eld projects – Factors and point allocation
Innovative processes
6.1 For the purposes of sections 12I(8)(a)(i) and 12I(10)(a), a green eld project is regarded as upgrading
an industry within the Republic by utilising innovative processes where the Minister of Trade and Industry, after taking into account the recommendations of the adjudication committee, is satis ed that—
(a) the project will utilise processes of innovation, thereby changing pre-existing techniques and the use
of plant, machinery and equipment within the same industrial sector as the project; and
(b) these processes will materially improve production time, reduce production costs, improve product quality or improve product longevity, as compared to existing production time, production costs,
product quality or product longevity within the same industrial sector as the project.
Improved energy ef ciency with emphasis on cleaner production technology
6.2 For the purposes of section[s] 12I(8)(a)(ii) and 12I(10)(g), a green eld project is regarded as utilising
new technology that results in improved energy ef ciency and cleaner technology where the Minister of Trade and Industry, after taking into account the recommendations of the adjudication committee, is satis ed that the project will utilise modern, viable energy-ef cient equipment and processes throughout the additional investment allowance bene t period, innovative for the particular industrial sector, as certi ed by the South African National Energy Development Institute (not taking into account any period before the month in which the industrial policy project reaches 50 per cent of its production capacity).
General business linkages
6.3 For the purposes of section 12I(8)(b) and 12I(10)(b), a green eld project is regarded as providing
general business linkages within the Republic where the Minister of Trade and Industry, after taking into account the recommendations of the adjudication committee, is satis ed that—
(a) the project will be engaged in the production of goods, where less than 40% of the local demand for such
goods is produced in the Republic or where these goods were not previously produced in the Republic; or
(b) the project will contribute to the global competitiveness of an industrial sector by the production of goods on the basis that identical or similar goods would not be produced in the Republic without
substantial capital investment.
Acquiring goods and services from small, medium or micro enterprises
6.4 For the purposes of section[s] 12I(8)(c) and 12I(10)(c), a green eld project will be regarded as acquiring
goods and services from small, medium or micro enterprises where the Minister of Trade and Industry, after taking into account the recommendations of the adjudication committee, is satis ed that the project will acquire at least 10 per cent of its raw materials, intermediate products and services based on the annual cost to the industrial project (including direct and indirect operating costs) from enterprises which at the time of acquisition of the goods and services are small, medium and micro enterprises (excluding any small, medium or micro enterprise which is a connected person, as de ned in section 1 of the Act in relation to the company carrying on that industrial policy project) during the additional investment allowance bene t period.
Direct employment creation
6.5 For the purposes of section[s] 12I(8)(d) and 12I(10)(d), a green eld project is regarded as creating
direct employment within the Republic where the Minister of Trade and Industry, after taking into account the recommendations of the adjudication committee, is satis ed, that the project will by the end of the additional investment allowance bene t period create at least—
(a) 0,67 full-time jobs (but less than 1 full-time job); or
(b) 1 full-time job,
for each R1 million of cost of manufacturing assets in respect of the project (not taking into account amounts above R1 billion).
Skills development
6.6 For the purposes of section[s] 12I(8)(e) and 12I(10)(e), a green eld project is regarded as providing
skills development within the Republic where the Minister of Trade and Industry, after taking into account the recommendations of the adjudication committee, is satis ed that the cost of training in respect of the project will exceed as a percentage of the wage bill over the additional training allowance bene t period— (a) more than 2 per cent of the annual average, but less than 2,5 per cent; or
(b) 2,5 per cent or more of the annual average.
[Reg. 6.6(b) amended by GN R633 of 20 August 2012.]
Location in industrial development zone
6.7 For the purposes of section[s] 12I(8) (9 and 12I(10)(f), a green eld project is regarded as being
located within an Industrial Development Zone where the Minister of Trade and Industry, after taking into account the recommendations of the adjudication committee, is satis ed that the project is located in an area designated by the Minister of Trade and Industry as an Industrial Development Zone in terms of the Industrial Development Zone programme announced under section 10 of the Manufacturing Development Act, 1993 (Act 187 of 1993).
[Reg. 6.7 amended by GN R633 of 20 August 2012.]
S 12I regs
(1 point)
(a maximum of 2 points depending
on energy e ciency)
(1 point)
(1 point)
(1 point) or (2 points)
(1 point) or (2 points)
(1 point)
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