With tax season kicking off this week, households who’ve splurged on rooftop solar will be in for a rebate.
National Treasury has outlined the basic characteristics and requirements for the solar panel incentive, which is meant to help individuals in their immediate decision making regarding any solar installation.
Individuals who pay personal income tax can claim the rebate against their tax liability. Individuals will be able to claim a rebate to the value of 25% of the cost of new and unused solar PV panels, up to a maximum of R15,000 per individual. They will also be able to claim the rebate if they provide a certificate of compliance evidencing that the solar PV panels were brought into use for the first time in the period from 1 March 2023 to 29 February 2024.Only new and unused solar PV panels qualify to ensure that the capacity is in addition to what the country already has in place. The panels can be installed as part of a new system, or as an extension of an existing system.
The solar PV panels must form part of a system that is connected to the mains distribution of the private residence. “The focus on solar PV panels is to maximise the use of limited government funds to get as much additional generation capacity as possible – and recognises that government will have to focus on a partial rebate of the components that are most directly linked to generation. This is why installation costs are not included either,” National Treasury said.
There will, however, be a claw-back of the rebate if one sells the panels within one year after they were first brought into use. This is to counter potential abuse.A draft version of the legislation will be published for public comment no later than the publication date of the 2023 Draft Taxation Laws Amendment Bill.
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