Capital Incentive Allowances | South Africa Tax Guide

Asset Type	Conditions for Accelerated Allowance	Accelerated Allowance Percentage	Conditions for Annual Allowances	Annual Allowance
Industrial Buildings	Not applicable for buildings brought into use or improvements completed after 31 December 1989	Previously 17.5%	Cost of erection of buildings or improvements, provided building is used wholly or mainly for carrying on a process of manufacture or similar process	5% With effect from 1/7/96 -10%
Hotel Buildings	Not applicable for buildings brought into use or improvements completed after 4 June 1988	Previously investment allowance of 10%	Cost of portion of erection or improvements, provided registered as a hotel	5%
Residential Buildings	Cost of buildings erected (Project must consist of at least five family units) intended for letting or occupation by a bona fide full - time employee Erection commenced on or after 1 April 1982	10%	Same conditions as for accelerated allowance	2%
Benefication Process	35% value is added to raw material or any intermediate product (See Note 8 & 9 ) At least 60% processed products are exported The processed output is internationally competitive	See Plant & Machinery and Industrial Buildings	Commence write down & deduct interest & finance charges in the year in which expenses are incurred ( See note 8)	See Plant & Machinery & Ind. bldings
Aircraft	Cost of aircraft used for transporting persons, livestock, goods or mail for reward Must first be registered in the RSA	Nil	Must be used for purposes of trade	20%
Ships	Cost of ship used for prospecting, mining or as a foreign - going ship Must be a South African registered ship	Nil	Must be used for purposes of trade	20%
Plant & Machinery	Not applicable (See Notes 5 and 10)	Nil	Cash cost of plant & machinery purchased under an agreement formally signed by all parties on or after 15 December 1989	20% 33.33% on all new & unused plant & machinery acquired on or after 1 July 1996 to 30 Sep 1999
Hotel Equipment	Not applicable (See Note 6)	Nil	Cash cost of machinery, implements, utensils or articles purchased under an agreement formally signed by all parties on or after 16 December 1989	20%