Page 632 - SAIT Compendium 2016 Volume2

IN 72 Income Tax acT: InTeRPReTaTIon noTes IN 72
(b) the full cost of fuel for private use of such vehicle, the Commissioner must upon the assessment of the employee’s liability for normal tax for the year of assessment reduce the value placed on the private use of the vehicle during that year of assessment calculated under subparagraph (4) by an amount determined for the total kilometres travelled for private purposes by applying the rate per kilometre for fuel xed by the Minister in the Gazette for purposes of section 8 (1) (b) (ii) and (iii).
(8A) For the purposes of subparagraphs (7) and (8), if the employee contemplated in those subparagraphs is a ‘judge’ or a ‘Constitutional Court judge’ as de ned in section 1 of the Judges’ Remuneration and Conditions of Employment Act, 2001 (Act No. 47 of 2001), the kilometres travelled between the judge’s place of residence and the court over which the judge presides must be deemed to be kilometres travelled for business purposes and not for private purposes.
(10) For the purposes of this paragraph the private use by an employee of a motor vehicle shall be deemed to have no value, if—
(a) (i) the vehicle is available to and is in fact used by employees of the employer in general;
(ii) the private use of the vehicle by the employee concerned is infrequent or is merely incidental to its business use; and
(iii) the vehicle is not normally kept at or near the residence of the employee concerned when not in use outside of business hours; or
(b) the nature of the employee’s duties are such that he or she is regularly required to use the vehicle for the performance of those duties outside his or her normal hours of work, and he or she is not permitted to use that vehicle for private purposes other than—
(i) travelling between his or her place of residence and his or her place of work; or (ii) private use which is infrequent or is merely incidental to its business use.
(11) For the purposes of this paragraph, ‘maintenance plan’, in relation to a motor vehicle, means a contractual obligation undertaken by a provider in the ordinary course of trade with the general public to underwrite the costs of all maintenance of that motor vehicle, other than the costs related to top-up uids, tyres or abuse of the motor vehicle, for at least a period of not less than three years and a distance travelled by the motor vehicle of not less than 60 000 kilometres from the date that the provider undertakes the contractual obligation: Provided that the contractual obligation may terminate at the earlier of—
(a) the end of the period of three years; or
(b) the date on which the distance of 60 000 kilometres is travelled by that motor vehicle.
Annexure B – Extract of income tax regulation: Fixing of rate per kilometre in respect of motor vehicles for the purposes of section 8(1)(b)(ii) and (iii) with effect from 1 March 2012
Where the value of the vehicle –
Fixed cost R
Fuel cost c/km
Maintenance cost c/km
does not exceed R60 000
19 492
73.7
25.7
exceeds R60 000, but does not exceed R120 000
38 726
77.6
29.0
exceeds R120 000, but does not exceed R180 000
52 594
81.5
32.3
exceeds R180 000, but does not exceed R240 000
66 440
89.6
36.9
exceeds R240 000, but does not exceed R300 000
79 185
102.7
45.2
exceeds R300 000, but does not exceed R360 000
91 873
117.1
53.7
exceeds R360 000, but does not exceed R420 000
105 809
119.3
65.2
exceeds R420 000, but does not exceed R480 000
119 683
133.6
68.3
exceeds R480 000
119 683
133.6
68.3
This cost scale table which is applicable to the 2012/2013 tax year, that is, from 1 March 2012 to 29 February 2013. The tables which are applicable to other tax years (including the 2011/2012 tax year) are available on the SARS website (www.sars.gov.za). The tables change periodically so it is important that taxpayers review the effective date of the particular notice to ensure they apply the correct costs to the correct tax years. Interpretation Note No. 14 (Issue 3) discusses and explains how this table operates. It also provides examples of what constitutes business travel and private travel.30
Annexure C – Extract from the Value-Added Tax Act No. 89 of 1991
‘cash value’, in relation to the supply of goods supplied under an instalment credit agreement, means—
(a) where the seller or lessor is a banker or nancier, an amount equal to or exceeding the sum of the cost to the banker or nancier of the goods, including any cost of erection, construction, assembly or installation of the goods borne by the banker or nancier and the tax leviable under section 7 (1) (a) in respect of such supply by
the banker or nancier; or
624
saIT comPendIum oF Tax LegIsLaTIon VoLume 2