Wear and Tear Allowances | South Africa Tax Guide 2006
Write - off periods acceptable to inland Revenue
1. Interest or finance charges payable in terms of suspensive sale or hire-purchase agreements concluded for acquisition of assets are deductible when paid and are excluded from the cost on which the above allowances are determined.
2. The above allowances are not apportioned for periods of use less than one year.
3. The above allowances are recoupable on disposal of the assets.
4. Hotel buildings or improvements, erection of which commenced before 4 June 1988, qualified for an investment allowance of 10%, an annual allowance of 2% and an allowance based on the grading of the hotel.
5. New or used plant and machinery brought into use in a process of manufacture or similar process on or after 1 January 1989 and acquired on or before 15 December 1989 may be written off over a period of three years (ie) 50% in the first year, 30% in the second year and 20% in the third year.
6. Machinery, implements, utensils and articles (other than motor vehicles, office equipment or equipment in servants' rooms) bought into use by hoteliers on or after 1 January 1989 and acquired under an agreement on or before 15 December 1989 may be written off over a period of three years (ie) 50% in the first year, 30% in the second year and 20% in the third year.
7. Plant and machinery brought into use after 15 December 1989 is depreciated at 20% per annum on the straight line basis. New or used plant used in a manufacturing or similar process qualifies for the allowance.
8. The taxpayer may apply for a negotiable tax credit certificate where there is an insufficient or no tax base.
9.A formula is used to calculate the value added -
A - (B+C) / A x 100/ 1
A = Ex-Factory price of intermediate product to final product produced
B = Cost of raw materials and intermediate products used in production of output
C = Any machinery, implements, utensils and articles purchased after this date may be written off over a period of 5 Years
10. New manufacturing assets aquired within 3 years from 1 March 2002 will be depreciated over 4 years. 405 of the cost will be deducted in the first year, and 20% for each of the following 3 years.
| Item | Period of write -off
(no. of years) |
Item | Period of write - off (no. of years) |
| Adding machines | 6 | Engraving equipment | 5 |
| Air - conditioners: window type | 6 | Excavators | 4 |
| Aircraft: light pass/ commercial/ helicopter | 4 | Fax machines | 3 |
| Arc welding equipment | 6 | Fertiliser spreaders | 6 |
| Balers | 6 | Fire extinguishers ( loose units) | 5 |
| Battery charges | 5 | Fishing Vessels | 12 |
| Bicycles | 4 | Fitted carpets | 6 |
| Bulldozers | 3 | Fork - lift trucks | 4 |
| Burglar Alarms (removable) | 10 | Front - end loaders | 4 |
| Calculators | 3 | Furniture and fittings | 6 |
| Cash registers | 5 | Gantry cranes | 6 |
| Cellular telephone | 3 | Garden irrigation equipment (movable) | 5 |
| Cheque writing machines | 6 | Gas cutting equipment | 6 |
| Cinema equipment | 5 | Gas heaters and cookers | 6 |
| Cold drink dispenser | 6 | Gear shapers | 6 |
| Compressors | 4 | Graders | 4 |
| Computer (main frame) | 5 | Grinding machines | 6 |
| Computer (personal computer) | 3 | Guillotines | 6 |
Computer software (main frames):
|
2 3 1 |
Gymnasium equipment | 10 |
| Computer software (personal computer) | 2 | Hairdressers equipment | 5 |
| Concrete transit mixers | 3 | Harvesters | 6 |
| Containers | 5 | Heat dryers | 6 |
| Crop sprayers | 6 | Heating equipment | 6 |
| Curtains | 5 | Hot water systems | 5 |
| Debarking equipment | 4 | Incubators | 6 |
| Delivery vehicles | 4 | Ironing and pressing equipment | 6 |
| Demountable partitions | 6 | Kitchen equipment | 6 |
| Dental and doctors equipment | 5 | Knitting machines | 6 |
| Dictaphones | 3 | Laboratory research equipment | 5 |
| Drilling equipment (water) | 5 | Latches | 6 |
| Drills | 6 | Laundromat equipment | 5 |
| Electric saws | 6 | Law reports | 5 |
| Electrostatic copiers | 6 | Lift installations (goods) | 12 |
| Lift installations (passengers) | 12 |
Wear and Tear allowances
Write - off periods acceptable to inland Revenue
| Item | Period of write - off (no. of years) |
Item | Period of write - off (no. of years) |
| Medical theatre equipment | 6 | Sanders | 6 |
| Milling machines | 6 | Security systems | 6 |
| Mobile caravans | 5 | Seed separators | 6 |
| Mobile cranes | 4 | Sewing machines | 6 |
| Mobile refrigeration units | 4 | Shop fittings | 6 |
| Motorcycles | 4 | Solar energy units | 5 |
| Motorised chain saws | 4 | Special patterns and tooling | 2 |
| Motorised concrete mixers | 3 | Spin dryers | 6 |
| Motor mowers | 5 | Spot welding equipment | 6 |
| Musical instruments | 5 | Staff training equipment | 5 |
| Neon signs and advertising boards | 10 | Stainless steel containers | 5 |
| Ovens and heating devices | 6 | Surveyors:
|
10 5 |
| Oven for heating food | 6 | Tape - recorders | 5 |
| Oxygen concentration | 3 | Telephone equipment | 5 |
| Paintings (valuable) | 25 | Television and advertising films | 4 |
| Pallets | 4 | TV sets, video machines and decoders | 6 |
| Passenger cars | 5 | Textbooks | 3 |
| Patterns, tooling and dies | 3 | Tractors | 4 |
| Perforating equipment | 6 | Trailers | 5 |
| Photocopying equipment | 5 | Traxcavators | 4 |
| Photographic equipment | 6 | Trucks (heavy duty) | 3 |
| Planers | 6 | Trucks (other) | 4 |
| Pleasure craft etc. | 12 | Truck mounted cranes | 4 |
| Portable concrete mixers | 4 | Typewriters | 6 |
| Ploughs | 6 | Vending machines (inc. video game) | 6 |
| Portable generators | 5 | Video cassettes | 2 |
| Portable safes | 25 | Washing machines | 5 |
| Power tools ( hand operated) | 5 | Water distillation and purification plant | 12 |
| Public address systems | 5 | Water tankers | 4 |
| Race horses | 4 | Water tanks | 6 |
| Radio communication equipment | 5 | Weighbridges (movable parts) | 10 |
| Refrigerated milk tank | 4 | Workshop equipment | 5 |
| Refrigerated equipment | 6 | X - ray equipment | 5 |
| Refrigerators | 6 | ||
| Runway lights | 5 |
Please note: Items of a value of less than R5000 may be written off in full in year one.