Investors in South Africa - Get Tax Benefit under Section 12J
Every year the number of entrepreneurs is booming in South Africa. So is the opportunity in the investment avenue in the industry. There are several industries where in new ideas and innovations are required. New business class, novel ideas gives a huge potential for the developing countries to increase the national income. In the financial services industry, one of the key phenomenons to be noticed is on capital funding. There was a time when most of those business enthusiasts who wished to start up their own business venture searched for various sources to raise capital. They approached leading public sector banks, private financial institutions, and credit lending companies in South Africa.
The main reason to decline their borrowing requirement was the sort of uncertainty and high risk. This situation led to shatter the dreams of the entrepreneurs when the U.K saw millions of pounds reaped from a new mode of capital funding. Venture financing became the trend, it witnessed that setting back of the ignited minds of entrepreneurs for the reason of risk, and uncertainty is foolishness. South Africa has now many Venture Capital Companies that has created a boom for the country’s revenue. With the new asset class introduced by the South Africa Revenue Services under Section 12J of the Income Tax Act, investors get a new way to source capital.
Investors will be able to fund capital through the venture capitalists for its business expansion. Investors get a direct tax exposure up to 40% relief on investments made through Venture Capital. Section 12J of the Income Tax Act provides any investors for deduction on income on account of expenses raised for issue of capital to the Venture Capitalist. To claim this tax benefit, the venture capital firm has to satisfy the criteria as mentioned in Section 12J (5) of the Income Tax Act. The investment cap is unlimited.
Deductions will not be obtained if you have purchased from another shareholder; loan has been taken for investment purpose; if it is preference shares, if you can realize the value of shares beyond the market value. A company can qualify the Venture Capital requirement if it a citizen and resident of South Africa with prime objective to assist in funding of companies for capital assistance and adherence to SARS tax guidelines. You can take Grovest Venture Capital Company for the capital requirements who are the first of its kind Venture Capitalists in South Africa.
Resource
The author of the article has an extensive experience Financial_Services, Growth Funding Especially in the field ofSAVCA & angel Funding.
The main reason to decline their borrowing requirement was the sort of uncertainty and high risk. This situation led to shatter the dreams of the entrepreneurs when the U.K saw millions of pounds reaped from a new mode of capital funding. Venture financing became the trend, it witnessed that setting back of the ignited minds of entrepreneurs for the reason of risk, and uncertainty is foolishness. South Africa has now many Venture Capital Companies that has created a boom for the country’s revenue. With the new asset class introduced by the South Africa Revenue Services under Section 12J of the Income Tax Act, investors get a new way to source capital.
Investors will be able to fund capital through the venture capitalists for its business expansion. Investors get a direct tax exposure up to 40% relief on investments made through Venture Capital. Section 12J of the Income Tax Act provides any investors for deduction on income on account of expenses raised for issue of capital to the Venture Capitalist. To claim this tax benefit, the venture capital firm has to satisfy the criteria as mentioned in Section 12J (5) of the Income Tax Act. The investment cap is unlimited.
Deductions will not be obtained if you have purchased from another shareholder; loan has been taken for investment purpose; if it is preference shares, if you can realize the value of shares beyond the market value. A company can qualify the Venture Capital requirement if it a citizen and resident of South Africa with prime objective to assist in funding of companies for capital assistance and adherence to SARS tax guidelines. You can take Grovest Venture Capital Company for the capital requirements who are the first of its kind Venture Capitalists in South Africa.
Resource
The author of the article has an extensive experience Financial_Services, Growth Funding Especially in the field ofSAVCA & angel Funding.
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