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Income Tax Act, 1962 (Act 58 of 1962)

Chapter II: The Taxes

Part I: Normal Tax

12U. Additional deduction in respect of roads and fences in respect of production of renewal energy

 

(1) There must be allowed to be deducted by a person any amount actually incurred during the year of assessment in which that expenditure is incurred, subject to subsection (3), in respect of—
(a) the construction of any road or the erecting of any fence and a foundation or supporting structure designed for such a fence for the purpose of trade of that person of generation of electricity which exceeds 5 megawatts from—
(i) wind power;
(ii) solar energy;
(iii) hydropower to produce electricity of not more than 30 megawatts; or
(iv) biomass comprising organic wastes, landfill gas or plant material; or
(b) improvements (other than repairs) to—
(i) any road or fence contemplated in paragraph (a); or
(ii) foundation or supporting structure designed for such a fence, subject to subsection (2).

 

(2) For the purpose of any deduction under subsection (1)—
(a) the foundation or supporting structure designed for a fence must be constructed in such manner that the foundation or supporting structure is or should be regarded as being integrated with that fence; and
(b) the useful life of the foundation or supporting structure is or will be limited to the useful life of that fence.

 

(3) For purposes of deduction under subsection (1) any expenditure—
(a) actually incurred by that person prior to the commencement of and in preparation for carrying on that trade;
(b) which would have been allowed as a deduction in terms of subsection (1) had the expenditure been incurred after that person commenced carrying on that trade; and
(c) which was not allowed as a deduction in any previous year of assessment,

shall be allowed as a deduction in terms of this section.’’.

 

[Section 12U inserted by section 36 of the Taxation Laws Amendment Act, 2016 (Act No. 15 of 2016) - deemed to have come into operation on 1 April 2016]