South Africa
19.A25. Exploration or prospecting expenditure may, in certain cases, be deducted in toto from mining income in the year in which it is incurred, or over the life of the mine, according to the discretion of the taxing authority. This twofold approach resembles section 122J of the Australian Act in that an immediate write-off is generally allowed if the mine has reached the production stage. Where a mine has not reached the production stage, no portion of the capital expenditure can be deducted since such expenditure may only be deducted from income derived from mining operations. In such a case, the capital expenditure is accumulated and amortised over the life of the mine.
19.A26. In relation to mines that commence production in any years of assessment after 31 December 1973, capital expenditure (whether on exploration or development) incurred after that date is fully deductible and may, if it exceeds the assessable income of the enterprise, promote an assessed loss. A balance of any assessed loss incurred in a previous year of assessment may be carried forward to the succeeding year of assessment to be set off against income derived from any other business in the Republic. If in any year of assessment the taxpayer does not carry on any other business, he is not permitted to carry forward to this year any balance of assessed loss established in respect of the immediately preceding year of assessment. In this way, the taxpayer forfeits his right to claim a deduction for the accumulated loss.