What useful life should be considered when estimating the TAB factor of an intangible asset?
Amortisation of intangible assets is not always tax deductible. Its deductibility depends on the corporate income tax legislation of single countries. Most countries define maximum amortisation rates or minimum number of years in which the amortisation of intangible assets can be deducted, if at all. This page displays the legal tax amortisation periods of the main types of intangible assets.
|Country||Patents||Technology||Trademark||Customer relationships||Goodwill||Last update|
|South Africa||20||no TAB||no TAB||no TAB||no TAB||Apr 2016|
Further Detail and Source Legislation
The tax amortisation periods allowed in South Africa are defined in paragraph (o) of Article 11 of the Income Tax Act 58 of 1962.
Intangible assets: as a general rule, amortisation of intangible assets is not tax deductible. Therefore purchase price should be allocated to tangible assets as much as possible. As an exception, amortisation of acquired Patents can be deducted with a 5% p.a. limitation (Article 11 - Section gC-V-aa-A).
Goodwill: no tax amortisation is allowed.