Scientific and Technological Research and Development (R&D) Tax Incentive
The incentive is aimed at encouraging private sector businesses to invest in and conduct R&D in South Africa. With increased R&D, businesses can enhance innovative capability and create new products, processes, devices and techniques, and/or improve existing ones.
Specific activities are excluded from the R&D Tax Incentive, examples are; the activities that are not within the scope of eligible R&D as defined in section 11D(1) of the ITA, post-R&D activities, and activities conducted outside the Republic of South Africa (even if funded from within the country). In addition, the following activities are ineligible, in respect of multisource pharmaceutical product and clinical trial R&D projects; phase IV clinical trials (see guideline) other than a clinical trial conducted for the purpose of developing new indications, developing new methods of administration or developing new combinations of pharmaceutical products, post-marketing research, cost-effectiveness research, any activities undertaken for the purpose of compliance with regulatory requirements, a product familiarisation programme, research carried out for statistical purposes (meta-analysis) and epidemiological research.
To apply for the R&D Tax Incentive, a company must complete an application form (available on the DST website) and submit it to the DST by email at: email@example.com.
The incentive is available to South African registered companies of all sizes in any sector of the economy. These companies must undertake qualifying R&D in the Republic of South Africa and the R&D activities must meet the definition of R&D in section 11D(1) of the ITA in order to qualify.