The Future of the R&D Tax Incentive

In a previous blog post, we discussed the extension of the R&D Tax Incentive. This past week National Treasury, the Department of Science and Innovation (DSI), and Industry came together to discuss the future of the incentive.

National Treasury reiterated the Finance Minister’s remarks regarding the importance of the R&D Incentive to the South African economy and the support that government provides for innovation in our country. The session debated the comments received in response to the survey, this led to a robust discussion of the role and future of the incentive and how it should be structured in the coming years.

The main discussion points surrounded the definition of R&D (including the requirement of innovation), making the definition more user-friendly and more in line with the international definition of R&D. Particular attention was given to the qualification of software projects and the impact that the incentive is and can have on SMMEs. The government is also considering removing the internal business process exclusion – this could open up the incentive to a wider scope of applications.

Treasury and the DSI were extremely open to hearing from the R&D community and are taking all comments and suggestions under consideration. We should see significant progress and improvements to the incentive in the coming months – we have already started testing a new online application system.

As always, we will keep you updated on all of the happenings surrounding innovation incentives!

The bottom line remains unchanged – apply early and apply often to maximise the benefit from the incentive.

Leave a Reply

Your email address will not be published.