Tax Free Cash Grants Paid Over Two Or Three Years


The Department of Trade and Industry launched their new incentive programme in July of this year. The programme is known as the Enterprise Investment Programme (EIP) and supports both Manufacturing (including Agro-Processing) and Tourism Activities.

New and Expanding entities (Companies including branches and divisions, Close Corporations and Co-Operatives) that are to be investing in Qualifying Assets will be eligible to apply to the DTI for EIP incentives.

The incentives take the form of a Tax Free Cash Grant and are paid out over a two or three year period depending on the size of the project.

Expanding Manufacturing entities will only qualify if they increase their existing Plant and Machinery (cost value) by at least 50% (smaller projects 35%) up to a maximum of R30m on a R200m investment.

Expanding Tourism entities that want to take advantage of EIP incentives need to increase their existing Furniture and Fittings (cost value) and Capacity (bed nights) by at least 35%.

The criteria in both Manufacturing and Tourism include the location of the project, BBBEE ratings and job creation. We would also be able to assist you with the BBBEE ratings.

Certain Manufacturing sectors are given priority for projects with Qualifying Assets above R5m.

It is a condition that applications need to be submitted and approved by the DTI prior to the acquisition (ordering) of Qualifying Assets, so the timing of the application is critical to the process.

There are other DTI cash grants available including the Foreign Investment Grant and the Export Incentive Allowance which provide further tax free financial assistance.

Can you afford not to consider whether your purchase of new or used assets qualifies for a tax-free cash grant?

Please contact Alexis Sacks or Dave Rich to take advantage of this exciting programme before it is too late.

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