Last year we all experienced the frustration of dealing with the teething problems of the pre-approval process at the Department of Science and Technology (DST). Approvals have started to come through and in speaking with the DST we know that they are working on smoothing out the process.
Changes to the R&D Tax Incentive were proposed in the middle of last year. After consultation with industry, thankfully, the National Treasury revised these amendments and removed some of the more ‘narrow’ wording.
These amendments have now been passed into law and are effective from January of this year.
The new legislation clarifies some of the definitions on included R&D placing a focus on the innovative nature of the R&D. Another major change is the ability of the Minister of Science and Technology to designate certain categories of R&D as qualifying R&D. This is expected to have a considerable impact on the pharmaceutical industry.
We are still awaiting for regulations and guidelines to be put out by the DST to clarify certain elements of the legislation.
How does this impact your company?
Certain categories of R&D which previously would not have qualified may now be in line to also benefit from the incentive.
It is important to continue submitting pre-approvals for all R&D being done, however, these submissions must now be in line with the new legislation.
Catalyst Solutions continues to partner with our clients and industry bodies to ensure that South African companies can maximise their return on R&D investment.
Please let us know if you have any questions on this or any other R&D incentives.