The National Treasury has published a brochure of frequently asked questions (FAQs) explaining the solar panel tax incentives for individuals and the documents that must be submitted with individual tax returns.
Beatrie Gouws, head of stakeholder management and strategic development at the South African Institute of Taxation (Sait), explains.
The FAQs indicate that rebates will only be allowed on “new and unused solar photovoltaic (PV) panels” that are permanently installed (nonportable), with a minimum capacity of 275W per panel (design output), that are purchased outright (no rent to buy arrangements) .
Avoid ‘portable’ settings
Gouws advised taxpayers not to set up “portables” and rent to buy arrangements until the draft legislation is released.
According to the FAQ, the rebate is available to every individual taxpayer who has solar PV panels installed on a home that is normally used by the individual for domestic purposes. It is not clear what position the two have in their homes.
Also read: What the solar tax rebate means for your small business
Gouws advises that until the draft law is published, joint owners should be cautious about claiming rebates. Declaring the home must be used “primarily” by the individual for domestic purposes generally means 50% or more.
It is not certain whether “50% or more” will refer to the surface area of the house or the period of time in the tax year in which the house is occupied for domestic purposes.
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Where the home is used for part of the year as a home, and then turned into a business, it is anticipated that the “mainly” requirement in this case will be determined based on the period of use of the property during the tax year. about which solar PV panels were installed.
Certificate of compliance
The FAQs refer to the “certificate of compliance”, which is qualified under the Electricity Installation Regulations, 2009, must be provided as proof that solar PV panels are used for the first time in the period from March 1 to February 29, 2024.
It is not clear who is the competent authority to issue the certificate.
The FAQs confirm that there will be no recoupment if the taxpayer sells the house after benefiting from the rebate because the panels are installed in the house.
Also read: Understanding rooftop solar tax incentives
However, if the panels are removed from the front and sold again in a year after they were first brought to use, Gouws warned that there will be a recoupment for taxpayers.
Sars had not responded to The Citizen’s inquiries by the date of publication. The draft Bill is expected to be released in August for public comment.