Page 360 - SAIT Compendium 2016 Volume1

Seventh Schedule INCOME TAX ACT 58 OF 1962 Seventh Schedule
Prelex
Wording of item (b) in force until its substitution wef date of promulgation of Taxation Laws Amendment Act, 2015 (b) the asset consists of any equipment or machine which the employer concerned allows his employees in general to
use from time to time for short periods and the Commissioner is satis ed that the value of the private or domestic use of the asset, as determined under subparagraph (2), is negligible;
(bA) the asset consists of telephone or computer equipment which the employee uses mainly for the purposes of the
employer’s business; or
(c) the asset consists of books, literature, recordings or works of art.
[Item (bA) inserted by s. 72 (b) of Act 60 of 2008.] RIGHT OF USE OF MOTOR VEHICLE (para. 7)
7. (1) For the purposes of this paragraph, ‘determined value’, in relation to a motor vehicle, means—
(a) where such motor vehicle (not being a vehicle in respect of which paragraph (b) (ii) of this de nition applies) was acquired by the employer, the retail market value thereof as determined by the Minister by regulation (excluding any
nance charge or interest payable by the employer in respect of the employer’s acquisition thereof); or
[Item (a) substituted by s. 50 (1) (a) of Act 129 of 1991, by s. 91 (1) (a) of Act 7 of 2010 and by s. 75 (1) (a) of Act 43 of 2014 – date of commencement: 1 March 2015; the substitution applies iro vehicles acquired on or after that date.]
(b)
where such motor vehicle—
(i) is held by the employer under a lease (other than an ‘operating lease’ as de ned in section 23A (1)); or
[Subitem (i) substituted by s. 101 (1) (a) of Act 22 of 2012 – date of commencement: 1 March 2013; this substituted subitem applies in respect of years of assessment commencing on or after that date.]
(ii) was held by the employer under a lease (other than an ‘operating lease’ as de ned in section 23A (1)) and the ownership thereof was acquired by the employer on the termination of the lease,
[Subitem (ii) substituted by s. 101 (1) (a) of Act 22 of 2012 – date of commencement: 1 March 2013; this substituted subitem applies in respect of years of assessment commencing on or after that date.]
the retail market value thereof at the time the employer rst obtained the right of use of the vehicle or, where at such time such lease was a lease contemplated in paragraph (b) of the de nition of ‘instalment credit agreement’ in section 1 of the Value-Added Tax Act, the cash value thereof as contemplated in the de nition of ‘cash value’ in the said section; or
[Words following subitem (ii) substituted by s. 120 of Act 31 of 2013 – date of commencement: 12 December 2013.] [Item (b) amended by s. 50 (1) (b) of Act 129 of 1991, by s. 36 (1) of Act 141 of 1992 and by s. 91 (1) (b) of Act 7 of 2010.] (c) in any other case, the retail market value, as determined by the Minister by regulation, of such motor vehicle at the
time when the employer rst obtained the vehicle or right of use thereof or manufactured the vehicle:
[Item (c) substituted by s. 75 (1) (b) of Act 43 of 2014 – date of commencement: 1 March 2015; the substitution applies iro vehicles acquired or manufactured on or after that date.]
Provided that—
(a) where an employee has been granted the right of use of such motor vehicle as contemplated in subparagraph (2)
(other than a motor vehicle acquired under an operating lease as de ned in section 23A (1)) and such vehicle, or the right of use thereof, was acquired by the employer not less than 12 months before the date on which the employee was granted such right of use, there shall be deducted from the amount determined under the foregoing provisions of this subparagraph a depreciation allowance calculated according to the reducing balance method at the rate of 15 per cent for each completed period of 12 months from the date on which the employer rst obtained such vehicle or the right of use thereof to the date on which the said employee was rst granted the right of use thereof; and
[Para. (a) substituted by s. 101 (1) (b) of Act 22 of 2012 – date of commencement: 1 March 2013; this substituted paragraph applies in respect of years of assessment commencing on or after that date.]
(b) where such motor vehicle was acquired by the employer from an associated institution in relation to the employer and the employee concerned had, prior to such acquisition, enjoyed the right of use of such motor vehicle, the determined value shall be the determined value as at the date on which the employee was granted the right of use of such motor vehicle for the rst time.
[Sub-para. (1) amended by s. 32 (a) of Act 21 of 1994 and by s. 47 (1) (a) of Act 21 of 1995.]
(1A) . . .
[Sub-para. (1A) inserted by s. 32 (b) of Act 21 of 1994 and deleted by s. 47 (1) (b) of Act 21 of 1995.]
(2) Where an employee has been granted the right to use any motor vehicle as contemplated in paragraph 2 (b), the cash equivalent of the value of the taxable bene t shall be so much of the value of the private use of such vehicle (as determined under this paragraph in respect of the period of use) as exceeds any consideration given by the employee to the employer for the use of such vehicle during such period, other than consideration in respect of the cost of the licence,
insurance, maintenance or fuel in respect of such vehicle.
[Sub-para. (2) amended by s. 47 (1) (c) of Act 21 of 1995 and substituted by s. 91 (1) (c of Act 7 of 2010.]
(3) (a) Where an employer’s rights and obligations under a lease in respect of a motor vehicle are transferred to his employee the employer shall for the purposes of this Schedule be deemed to have granted the employee the right to use
such vehicle for the remainder of the period of the lease. (b) In such case—
(i) (ii)
any rentals becoming payable by the employee under the lease shall be deemed to be a consideration payable by him for the said right; and
the determined value of the vehicle shall be deemed to be an amount determined in accordance with the provisions of subparagraph (1) (b);
352
SAIT CompendIum oF TAx LegISLATIon VoLume 1