The promulgation of the regulations on the allowance for energy efficiency savings in terms of section 12L of the Income Tax Act as amended came into operation on November 1 2013.
Tax incentives are being introduced for businesses that can show measurable energy savings.
The 12L regulation sets out the process for determining the quantum of energy efficiency savings, and the requirements for claiming the proposed tax deduction.
Section 12L incentives include all energy efficiency projects that reduce energy use and is claimable until 2020. It is important to note that the tax incentive is available for savings in all energy forms and not only electricity.
The expected tax relief would be a 45 cents deduction on taxable income per kilowatt hour of energy saved – subject to all the conditions in the 12L regulations being met.
The regulation for 12L sets out the process for determining the quantum of energy efficiency savings, and requirements for claiming the proposed tax deduction.
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