SARS is part of the Adjudication Committee that approves the application for the R&D Tax Incentive.

SARS is also responsible for the company Income Tax Assessment. When the company submits its Income Tax Returns, the R&D expenses that were approved for the R&D Tax Incentive are included.

SARS will then allow a deduction when:

  • The R&D was pre-approved by the Minister of Science & Technology
  • The approval can be confirmed with the Application Number that was provided when the Tax Incentive application was approve
  • The expenditure has incurred:
    • Directly for research and development
    • In the production of income and
    • In the carrying on of trade

SARS will work out whether the claimed expenditure is within the boundaries of the expenditure approved by the Pre-Approval committee. SARS will confirm whether the expenditure was actually incurred in the production of income and in the carrying on of trade.

SARS is part of the Adjudication Committee that approves the application for the R&D Tax Incentive.

SARS retains its audit oversight role, even if the taxpayer has received pre-approval of an R&D project.

What is SARS role in the R&D Tax Incentive?