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.

Summary Table

CountryPatentsTechnologyTrademarkCustomer relationships GoodwillLast update
South Africa20no TABno TABno TABno TABApr 2016

Further Detail and Source Legislation

The tax amortisation periods allowed in South Africa are defined in paragraph (o) of Article 11[1] 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.[2] 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.

  1. ^ Article 11 of the Income Tax Act 58 of 1962
  2. ^ KPMG-Taxation of Cross-Border Mergers and Acquisitions South Africa 2012

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