12L Tax Incentive
The recently published Section 12L regulations on the income tax allowance enable industries to claim a tax allowance at a rate of R 0.95 per kWh saved from a baseline in terms of the Income Tax Act of 1962. The tax incentive is available for savings in all energy forms and not only electricity. Tax cannot be claimed for renewable energy projects such as Biomass, geothermal, hydro, ocean currents, solar, tidal waves and wind projects. In order for taxpayers to claim the tax allowance from SARS, the regulation requires that energy savings reports must be compiled and submitted by registered measurement and verification (M&V) bodies that are accredited by the South African National Accreditation System (SANAS). South African National Energy Development Institute (SANEDI) is the organisation currently tasked with the responsibility of adjudicating, evaluating and supporting 12L tax incentive projects.
The claimant can register the tax incentive project on the Tax Incentive Online Management System via www.saneditax.org.za. The roadmap for applying tax incentives for claimant can be depicted as follows.
Onga M&V Service
Onga Energy Efficiency and Management Pty Ltd is the first SANAS accredited Measurement and Verification (M&V) inspection body for energy savings. SANAS has granted Onga full scope M&V inspections for 12L tax incentive projects. With more than 5 years’ experience in M&V, The personnel of Onga include 5 CMVPs among which 3 are SANAS accredited technical signatories, who are experienced and committed to conduct M&V inspections of the highest quality. Onga provides the third-party M&V service to provide full guidance in M&V issues of the 12L tax incentive application, to activate your application to SANEDI, to determine the quantum of energy efficiency savings, and to maintain the M&V raw data and record for seven years after your claim.
Onga M&V Request
The reports issued by Onga serve as the basis for SANEDI to issue the certificate of the energy savings. To contract Onga as the M&V inspection body for your 12L project, please fill in the Onga M&V request form from our online submission system via request form. Onga will analyse the scope of work and calculate the M&V cost.
Then an official M&V contract can be entered for M&V purpose should you accept the cost quotation.
