Budget 2023 - Tax rebate for Residential and Commercial solar

From the budget today:

Interesting points/caveats:

  • Only if CoC issued after 1 March 2023
  • Only on the panels (not inverters/batteries) - which makes sense if you think about it (kind of, there are arguments for the inverter)
  • 25% of cost of panels, up to R15k

Some docs from the Treasury:

Just to add (for businesses):

businesses will be able to claim a 125 per cent deduction in the first year for all renewable energy projects with no thresholds on generation capacity. The adjusted incentive will only be available for investments brought into use for the first time between 1 March 2023 and 28 February 2025. For a business with positive taxable income, the deduction will reduce its tax liability. For example, a renewable energy investment of R1 million would qualify for a deduction of R1.25 million.

Chapter 4.pdf (treasury.gov.za)

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Yeah, just came here to update on that.
The commercial side is a biggie, 125% of cost (note: NOT limited to panels, so alles) deducted from tax.
ie: If you have a business, why the hell are you not putting up solar?

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No inverter no generation :wink:

From the FAQ:

Yeah, they could have expanded it a bit (see @MongooseMan’s post on the FAQ) to include an inverter as long as panels are also claimed, but oh well.

And just to confirm: ALLES.

There’s a binding ruling stating that ( SOUTH AFRICAN REVENUE SERVICE (sars.gov.za) or Deduction for Photovoltaic Solar Energy Plants | 2019 News | News and Events | PKF South Africa):

The taxpayer will purchase the photovoltaic solar panels, appoint and pay independent contracts to perform the installation planning, procure and purchase all other relevant equipment and install the systems at the relevant sites. These systems at each site comprised of the panels, AC inverters, DC combiner boxes, racking, cables and wiring.

In terms of the ruling, the taxpayer was entitled to claim the costs in respect of all the components of each system in terms of sections 12B(1) and (2). As each system will generate less than 1 megawatt of electricity, 100% of these costs were deductible in the year brought into use. No deduction was, however, claimed in respect of the costs of distribution boxes as it did not form part of the photovoltaic solar energy system.

So that now changes to no limit and 125% of costs.

BUT I need an MPPT with my panels as its a distributed system (Victron) so I plan to claim that as well.

You can try, but I think they’ve been very clear on what they’ll reimburse for, and what their rationale is.
You can disagree with them, but they’re going to ask for your invoice, and I’d be surprised if they will credit any line items on there that aren’t strictly panels.

Try to find a supplier that will give you a price on panels with a “free” MPPT… I’m guessing there are going to be lots of “specials” like that next month…

I can certainly see a market for “pricey panels + cheap inverter and battery” bundles … Our government is an absolute specialist at creating unnecessary complexity. Wonder what the price for an updated invoice and COC would be in the free market.

You guys have spotted that loophole far quicker than our government did…

The R15k upper limit does limit the ability to take advantage of the loophole though

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Haha I thought of it, but SARS might audit the reasonability of prices. Might even just allow you a deductible based on some price range they have. For example, you may not “give” someone a zero interest loan. There’s a minimum amount of interest you have to charge, else it is a taxable benefit or something like that. I’m not big on tax, I just know that you shouldn’t underestimate their ability to make it difficult for you to find a loophole as simple as this.

If anyone thinks they can pull a fast one over Gov, they will be right.
If anyone thinks they can pull a fast one over SARS, they will be wrong.

Go ahead … test my statement. :slight_smile:

And if anyone thinks SARS “forgets”, think carefully.
Recently I had to provide proof of payments to SARS, for SARS payments, going back to 2003-2005.
Thank snot I still had paper records going back that far, or I would have been out of 10’s of thousands of rands.

SARS is not to trifle with for a meager couple of thousand … nope, not worth it.

But hey, some will try and get away … SARS never forgets.

Oh yes… don’t get me started. Someone at SARS decided to open the archives. Also ask our friend @Gman. My tax consultant has been keeping my name clear, thankfully, but my poor wife had penalties going back to 2017. All the taxes were paid, nobody screwed them over, and for 5 years they didn’t say a thing (despite having multiple ways of contacting people), and then one day they decided to reap it all…

I miss the Mbeki years when SARS placed ads on TV to thank us. These days they seem to have the opposite opinion of us…

A few years back, before Kieswetter, I had to pay in some old PAYE based on a submitted and paid-for, I had the proof, from yonks back.

Contacted the accountants and they said they are flooded with similar querries. To “fight” will cost more than the amount “demanded”. Just pay it, they said, so I did.

Now what most don’t know, back then, SDL, UIF and PAYE were filled in on the same form,.
And you paid all three with one cheque.

So the then skelms at SARS picked one of the three, PAYE being the most, and decided to tell people they “never” got paid.

It was common knowledge, back then, that you never pay in one payment. You pay separately, and mark each one clearly with its intended purpose. Because they literally did this, they would assign a payment to the most recent year, and keep nailing you penalties on a previous year. This didn’t happen to me though, someone I used to work with.

I even know this one guy, he realised at one point (after going through an extremely tough time when taxes and even salaries fell behind) that the only people he stills owes money to are SARS, but it was so much that it would take years to clear. The obvious way out was to liquidate the business, and he was even legally advised to do this, but… you are not allowed to do that if SARS is your only creditor. They tried to close that loophole.

Well, it turns out, all you have to do is owe someone else money too… and that is rather an easy thing to arrange.

I had our tax consultant say that they have a meeting tomorrow with SAIT to get clarity on all the announcements, specifically the solar part. I’ll post once I’ve got an answer.

But like you say, it’s pretty clear. They rebate on the cost of the panels. If you’ve got an inverter with built-in MPPT’s or not doesn’t matter. You’ll need to provide your invoice clearly showing a line item for your panels and also provide your CoC and they’ll give you 25% back on the cost of the panels.

I don’t want to mess with SARS. I’m also sure they’ll have some form of allowable range per Watt, so loaded deals will just be brought down in any case, but I don’t want to find out to try and gain a little when they’re already giving 25%.

Jip, someone decided to open the Pandora box !!! And SARS decided to bend there own rules from 10 years of storage rules to infinity storage. Like my book keeper is saying, they busy trying to find ways to get money in for the fat cats. She is busy sorting out my stuff with them.

Like @plonkster mention, I posted something on FB requesting if more people got the same mail, and i got a big responds. One friend that woks for tax consultant informed that most of the clients contacted them, even my book keeper inform that i was the 30th person calling her and counting.


Same story this side, and best of all, my wife was nagging non stop that I need to get rid of this box’s of papers with tax stuff, and see, now I need it and I still got it. My previous work HR person did a wonderful work by submitting our tax stuff under the wrong codes and seems to me more stuff is popping up now what they did.

So I got my good part of cut away with SARS