Domestic Trade Tax Incentives in Eswatini

1

Development Approval Order Income Tax Order

  • Corporate tax reduction at the maximum rate of 10% for ten years.
  • Exemption for withholding tax on dividends for ten years.
  • Applicable to an approved new investment or expansion of on existing company provided the expansion is on a stand-alone basis and is distinct from the existing company.
  • For investments in manufacturing, mining, international services and tourism sectors.
2

Machinery initial Allowance

  • 50% of the total cost of machinery brought for the first time to be used in manufacturing.
  • Excludes motor vehicles intended and adapted for use on roads.
3

Infrastructural Initial Allowance

  • 50% of the costs incurred on infrastructural machinery, plant or facilities, including transmission equipment, lines and pipes brought by the taxpayer for the first time to be used in the provision of infrastructural services - (including provision of electricity, water, sewer, rail facilities, and telecommunication)
4

Building Allowance

  • Initial allowance of 50% of the actual cost of a building that is mainly used for the purpose of housing
  • machinery or plant.
  • Annual allowance of 4% on cost remaining after the initial allowance
5Immovable property Allowance
  • Initial allowance of 50% of the capital expenditure costs in construction or improvement of a hotel (during the year of assessment for the first use of the hotel or improvements on an existing one)
  • Annual allowance of 4% for the succeeding years, with total allowance not to exceed the total expenditure.
6Export Promotion incentives
  • 133% of approved export promotion expenditure incurred by an approved company in the handcraft and cottage sector.
  • 150% of approved export promotion expenditure incurred by an approved trading house.
7

Hotel Allowance

  • Initial allowance of 50% of the capital expenditure costs in construction or improvement of a hotel (during the year of assessment for the first use of the hotel or improvements on an existing one)
  • Annual allowance of 4% for the succeeding years, with total allowance not to exceed the total expenditure.
8

Incentives for mining operations

    Immediate deduction from the income derived from mining operations for:
  • shaft sinking
  • building (offices, storage houses, etc)
  • equipment (renewals or replacements)
  • development, general administration and management prior to the commencement of production or during any period of non-production.
  • Excludes the cost of acquiring mineral rights
9

Specials R&D and training deductions

    Special deductions not to exceed 5% of taxpayer’s taxable income for:
  • Expenditure incurred in scientific researches
  • Contributions to any association, institute, college or university
  • Contributions, grants or donations to any of taxpayer’s employees to assist such employees in further training in his/her particular professional field at the University of Eswatini, or at any other institution for the purpose of securing a recognized qualification.
  • Contributions to an approved bursary scheme.
  • Contributions, grants or donations not exceeding E50,000 made to a professional body.
10

Incentives for pastoral, agricultural, plantation or other farming operations.

    Special deductions not to exceed 5% of taxpayer’s taxable income for:
  • Expenditure incurred in scientific researches
  • Contributions to any association, institute, college or university
  • Contributions, grants or donations to any of taxpayer’s employees to assist such employees in further training in his/her particular professional field at the University of Eswatini, or at any other institution for the purpose of securing a recognized qualification.
  • Contributions to an approved bursary scheme.
  • Contributions, grants or donations not exceeding E50,000 made to a professional body.
  • Deductions of the expenditures, not exceeding 30% of the gross income derived by taxpayer from farming operations in respect of:
  • dipping tanks
  • dams, water-furrows, irrigation schemes, wells
  • fences and the erection of buildings used in connection with farming operations (not to exceed E60 000)
  • eradication of toxic plants and prevention of soil erosion
  • planting of trees, shrubs or perennial plants for the production of fruits, vegetables and any other similar agricultural produce
  • building of roads and bridges used in connection with farming operations
  • carrying of electric power from the main transmission lines to the farm apparatus,
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