If your company undertakes R&D in South Africa, you have very good/every reason to claim for the R&D Tax Allowance. The R&D Tax Incentive is provided for in Section 11[D] of the Income tax Act. It allows your company to deduct an additional 50% on Operational R&D Expenses from taxable income. This reduces your taxable income. The R&D Tax Incentive translates to an effective 14% reduction in SARS income taxes.

In order to qualify for the R&D Tax Incentive, you need to apply to the Department of Science and Technology, before you start the R&D project. The R&D Tax Allowance is open to companies of any size, in any sector of the economy. You have to be a registered taxpayer with SARS. The R&D activities must be conducted here in South Africa. Once approved you receive an application number.

How do you write off research and development?