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Special Economic Zones
Posted 3 April 2020 under
Special Economic Zones (SEZ’s) are certain designated areas of a country demarcated by the government for special targeted economic activities. These are generally areas where business and trade laws are different from that of the rest of the country. The aim of these zones is to encourage increased foreign investment and trade, as well as job creation. This done by way of several tax incentives which are available to business which operate in SEZ’s.
They include the following: - preferential 15% corporate tax - building allowance for business owners who own buildings in this zone - employment incentive by way of tax relief for employers - tax relief for businesses that operate within a custom controlled area
An example of a SEZ Is a duty-free area next to a port where imported goods are unloaded, repackaged, stored and subsequently exported. Another example is an Industrial Development Zone, which is a purpose built industrial estate, where export oriented manufacturing services take place.
There are currently six SEZ’s in South Africa. They are the following: - Coega SEZ - Dube SEZ - East London SEZ - Maluti-a-Phofung SEZ - Richards Bay SEZ - Saldanha Bay SEZ
If the business operates in a SEZ, the location of the zone needs to be captured in the Company Tax Return (ITR14).