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R&D Approval

TAX TIP: R&D APPROVAL AFTER TAX RETURN SUBMISSION

To claim a deduction of 150% under section 11D of the Act, the taxpayer needs approval from the Minister of Science and Technology. Without the approval, the deduction cannot be claimed under section 11D. It often happens in practice, however, that R&D approval is granted only after the taxpayer’s year of assessment for which the deduction is sought and after the tax return for that year has been submitted. In these cases, taxpayers are allowed to request SARS to allow the deduction in the year of assessment to which the expenditure relates under section 11D(20) of the Act.

R&D APPROVAL AFTER TAX RETURN SUBMISSION

In fact, a taxpayer can request the deduction even if the original assessment has prescribed (i.e. even if approval is granted more than three years after the original assessment was issued), provided requirements are satisfied.  It is worth noting that claiming expenses actually incurred in one year in any other year is a criminal offence and will expose taxpayers to penalties.

Our speciality practice area is tax dispute resolution. Our team is headed by Nico Theron (Chartered Tax Advisor (SA)), author of Lexis Nexis’ Practical Guide to Handling Tax Disputes, Chairman of the South African Institute of Tax Professionals Tax Administration Work Group, guest lecturer on tax dispute resolution at post grad level at UP and WITS, head lecturer on The Tax Faculty’s dispute resolution course and founder of Unicus Tax Academy. If you’re looking for expert tax consultants in South Africa, get in touch.

Every effort was made to ensure accurate reflection of the law and the tax principles discussed in our articles or as set out on our website at the time of publishing on the website. Tax law develops all the time and it is therefore recommended that views expressed in the past be vented by users for current applicability and accuracy.  Comments made and views expressed in our articles and on our website does not constitute advice to any person or company. Unicus Tax Specialists SA will not be liable for any loss or damage of whatever nature or form caused due to reliance on this article.

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