Section 12BA is a South African tax incentive designed to encourage investment in renewable energy. It allows a taxpayer to claim a 125% deduction of the cost of new and unused assets used to generate electricity from renewable sources such as solar, wind, hydropower, or biomass.

To qualify:

• The asset must be new, unused, and owned by the taxpayer.
• It must be brought into use for the first time in producing income.
• The allowance applies to qualifying assets brought into use between 1 March 2023 and 1 March 2025.
• You cannot claim a Section 12BA deduction if you’ve already claimed one under Section 12B for the same asset.

This incentive provides businesses with a powerful opportunity to reduce taxable income while supporting sustainability, but compliance and proper documentation are key.

Why a certificate of compliance (CoC) matters

A Certificate of Compliance (CoC) confirms that an electrical or structural installation meets South Africa’s safety and legal standards. In most cases, an electrical CoC is required under the Occupational Health and Safety Act.

A valid CoC is important because it:

• Proves your installation is safe and legally compliant.
• Protects you against liability or insurance disputes.
• Is often required when selling property or completing a new installation.

For renewable-energy systems, a CoC ensures the installation meets regulatory standards, a crucial step when claiming tax incentives like Section 12BA.

Need assistance?

Navigating the requirements for Section 12BA and ensuring valid CoC documentation can be complex. Taxability can assist you with compliance, record-keeping, and the correct filing procedures to help you maximise your tax benefits while staying fully compliant. Contact us today for expert guidance and professional support.