The TaxTim Section 12C wear and tear calculator works out the accelerated tax allowance you can deduct on new or used plant and machinery used directly in a process of manufacture. Section 12C of the Income Tax Act gives manufacturers a much faster write-off than the general s11(e) wear and tear allowance, typically 40% in the first year and 20% over the next three years. Enter the asset cost, the date it was first brought into use and your financial year-end, and the calculator shows your full year-by-year s12C schedule for the 2027 tax year and beyond.
Section 12C of the Income Tax Act 58 of 1962 provides a special accelerated wear and tear allowance for qualifying assets owned by the taxpayer and brought into use for the first time. The allowance is calculated on the cost (cash cost) of the asset. Unlike the general s11(e) allowance, it is NOT apportioned for part of a year: you claim the full first-year percentage no matter which month the asset is first used. The percentage depends on the asset category: new or unused plant and machinery used directly in a process of manufacture is written off 40% in year 1 then 20% in each of the next three years (40/20/20/20); used or second-hand manufacturing plant gets 20% a year over five years; and new, unused plant or machinery used for approved research and development is written off 50/30/20 over three years. The calculator builds the schedule from the financial year in which the asset is first used. Small Business Corporations should instead use the SBC wear and tear calculator, which applies the s12E 50/30/20 (or 100% immediate) write-off.
Section 12C write-off rates (set in the Income Tax Act, unchanged for the 2027 tax year):
| Asset category | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| New / unused manufacturing plant & machinery | 40% | 20% | 20% | 20% | – |
| Used / second-hand manufacturing plant & machinery | 20% | 20% | 20% | 20% | 20% |
| New / unused approved R&D plant & machinery | 50% | 30% | 20% | – | – |
Key rules:
Example (2027 tax year, 1 March 2026 – 28 February 2027): A manufacturer buys a new, unused production machine for R500,000 and brings it into use for the first time in June 2026. The asset is used directly in a process of manufacture, so the 40/20/20/20 schedule applies, with no apportionment in year 1:
Total written off over four years = R500,000 (the full cost). The R200,000 first-year deduction reduces taxable income in the 2027 year of assessment.
Section 12C is a special accelerated tax allowance on plant and machinery used directly in a process of manufacture. New, unused assets are written off 40% in year one and 20% over the next three years (40/20/20/20). It lets manufacturers deduct the asset's cost much faster than the general s11(e) allowance.
New or unused manufacturing plant and machinery: 40% in year 1, then 20% for three years. Used or second-hand manufacturing plant: 20% per year over five years. New, unused research and development plant and machinery, where the R&D is approved, is written off 50%, 30% then 20% over three years.
No. Unlike the general s11(e) wear and tear allowance, the Section 12C allowance is not apportioned for part of a year. You claim the full first-year percentage (40%, 20% or 50% depending on the asset) regardless of which month during the financial year the asset is first brought into use.
Section 12C applies to plant and machinery used directly in a process of manufacture by any taxpayer. Section 12E is for Small Business Corporations (SBCs), allowing a 50/30/20 write-off or, for manufacturing assets, a 100% immediate deduction. If you qualify as an SBC, use the SBC wear and tear calculator instead.
On disposal, the allowances you previously claimed can be recouped, meaning they are added back to your taxable income, capped at the original cost under section 8(4)(a). If you sell for more than the original cost, the excess is generally subject to capital gains tax. Keep your asset and disposal records for SARS.
Yes. Used or second-hand plant and machinery used directly in a process of manufacture qualifies for a Section 12C allowance of 20% per year over five years. It must be owned by you and brought into use for the first time by you. SARS may request proof and documents describing the asset.
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