The 2020 Draft Taxation Laws Amendment Bill (released for public comment on 31 July 2020) includes a proposal to amend tax law provisions concerning special economic zones (SEZs) and specifically to align the sunset dates in the SEZ tax provisions.
The SEZ tax regime was first introduced in 2013 with a sunset date. The tax incentives would be available for a period of up to 10 years, and cease to apply in respect of any year of assessment beginning on or after 1 January 2024. However, the SEZ provisions were effective beginning in 2016, and thus because of the delay, qualifying companies were not being afforded the intended 10-year period during which the incentives were intended to be available.
In order to provide clarity, the draft measures propose to provide a single end-date with reference to a year of assessment commencing on or after 1 January 2028.
The draft bill is open for comment and will be finalised once all consultations have been concluded. Based on past experience, the final legislation would probably be published in October 2020 followed by signing and enactment in December 2020 or January 2021.
Read an August 2020 report [PDF 71 KB] prepared by the KPMG member firm in South Africa
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