National Treasury clarifies solar panel tax incentives

Nationwide Treasury printed a brochure of often requested questions (FAQs) clarifying the photo voltaic panel tax incentive for people and the paperwork that ought to be submitted with the person’s tax return.

Beatrie Gouws, head of stakeholder administration and strategic growth on the South African Institute of Taxation (Sait), unpacks it.

The FAQs point out that the rebate will solely be allowed in respect of “new and unused photo voltaic photovoltaic (PV) panels” which might be completely connected (nonportable), with a minimal capability of 275W per panel (design output), which might be bought outright (no lease to purchase preparations).

Keep away from ‘moveable’ set-ups

Gouws recommends taxpayers keep away from any “moveable” set-ups and any lease to buy preparations till the draft laws is launched.

In line with the FAQs, the rebate is accessible to any particular person taxpayer who has photo voltaic PV panels put in at a residence primarily utilized by a person for home functions. It’s unclear what the place is the place two people collectively personal a house.

ALSO READ: What the photo voltaic tax rebate means to your small enterprise

Gouws advises till draft laws is printed, joint house owners ought to be cautious about claiming the rebate. Stating a residence ought to be used “primarily” by a person for home functions, would typically imply 50% or extra.

It’s unsure whether or not the “50% or extra” will discuss with the floor space of the residence or the time-period within the tax 12 months in respect of which the residence is occupied for home functions.

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The place a house is used for a part of the 12 months as a house, and is thereafter became a enterprise, it’s anticipated the “primarily” requirement on this case will likely be decided based mostly on the interval of use of the property throughout the tax 12 months in respect of which the photo voltaic PV panels had been put in.

Certificates of compliance

The FAQs signifies a “certificates of compliance”, which qualifies below the Electrical Set up Rules, 2009, should be supplied as proof evidencing the photo voltaic PV panels had been introduced into use for the primary time within the interval from 1 March to 29 February 2024.

It’s unclear who could be the competent authority to challenge such a certificates.

The FAQs affirm there is not going to be a recoupment if the taxpayer sells their house after benefitting from the rebate because the panels are mounted to the house.

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Nevertheless, if the panels are faraway from the house and resold inside one 12 months after they had been first introduced into use, Gouws cautions there will likely be a recoupment for the taxpayer.

Sars had not responded to The Citizen’s questions by date of publishing. The draft Payments are anticipated to be launched in August for public remark.