Provisional Tax – Solar energy tax credit

Jan 26, 2024 | Uncategorised

26 January 2024 – In order to encourage households to invest in clean electricity generation capacity as soon as possible, a tax credit has been introduced under section 6C of the Income Tax Act for a limited time period.  Section 6C is deemed to have come into operation on 1 March 2023 and applies in respect of years of assessment commencing on or after this date. Furthermore, this section is only available for a period of one year, that is, from 1 March 2023 to 29 February 2024.

This tax credit applies to any natural person who is liable for personal income tax and who invests in qualifying solar photovoltaic panels (solar PV panels).

Under this section, a natural person may be eligible for the tax credit on the cost that has been actually incurred in respect of the acquisition of qualifying solar PV panels. The cost relating to other components of a complete solar energy system such as inverters, batteries and supporting structures do not qualify for the tax credit.

Since the intention is to encourage natural persons to invest in renewable energy, the carrying on of a trade is not a requirement to be eligible to claim this tax credit.

The Provisional Tax Return (IRP6) has been updated with a “Solar energy tax credit” field to enable provisional taxpayers to take the tax credit into account in determining provisional tax payable for the second provisional period of the 2024 year of assessment.

For more information, see the updated guide: GEN-PT-01-G01 – Guide for Provisional Tax – External Guide.

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