Page 361 - SAIT Compendium 2016 Volume1

Seventh Schedule INCOME TAX ACT 58 OF 1962 Seventh Schedule
(4) Subject to subparagraph (10), the value to be placed on the private use of such vehicle shall be determined for each month or part of a month during which the employee was entitled to use the vehicle for private purposes (including travelling between the employee’s place of residence and his or her place of employment) and the said value shall— (a) as respects each such month—
(i) be an amount equal to 3,5 per cent of the determined value of such motor vehicle: Provided that where the motor vehicle is the subject of a maintenance plan at the time the employer acquired the motor vehicle or the right of use thereof, that amount shall be reduced to an amount equal to 3,25 per cent of the determined value of the motor vehicle; or
(ii) where such vehicle is acquired by the employer under an ‘operating lease’ as de ned in section 23A (1) concluded by parties transacting at arm’s length and that are not connected persons in relation to each other, be—
(aa) the actual cost to the employer incurred under that operating lease; and
(bb) the cost of fuel in respect of that vehicle; and
[Item (a) amended by s. 30 of Act 96 of 1985, substituted by s. 10 (1) (a) of Act 108 of 1986, amended by GN 956 of 1988 and by s. 44 (1) of Act 90 of 1988, substituted by GN R715 of 1989, by s. 25 (1) of Act 70 of 1989, by GN R764 of 29 March 1990, by s. 58 (1) of Act 101 of 1990 and by s. 50 (1) (c) of Act 129 of 1991, amended by s. 47 (1) (d) of Act 21 of 1995, by s. 50 (1) of Act 28 of 1997 and by s. 56 (1) (a), (b) and (c) of Act 31 of 2005 and substituted by s. 91 (1) (e) of Act 7 of 2010 and by s. 101 (1) (c) of Act 22 of 2012 – date of commencement: 1 March 2013; this substituted item applies in respect of years of assessment commencing on or after that date.]
(b) as respects any such part of a month, be an amount which bears to the appropriate amount determined in accordance with item (a) (i) or (ii) for a month the same ratio as the number of days in such part of a month bears to the number of days in the month in which such part falls.
[Item (b) substituted by s. 101 (1) (c) of Act 22 of 2012 – date of commencement: 1 March 2013; this substituted item applies in respect of years of assessment commencing on or after that date.]
[Sub-para. (4) amended by s. 91 (1) (d) of Act 7 of 2010.]
(5) No reduction in the value determined under subparagraph (4) shall be made for the purposes of item (b) of that
subparagraph by reason of the fact that the vehicle in question was during any period for any reason temporarily not used by the employee for private purposes.
[Sub-para. (5) substituted by s. 91 (1) (f) of Act 7 of 2010.]
(6) Where more than one motor vehicle is made available by an employer to a particular employee at the same time and
each such vehicle was used by the employee during the year of assessment primarily for business purposes, the value to be placed on the private use of all the said vehicles shall be deemed to be the value of the private use of the vehicle having the highest value of private use or such other vehicle as the Commissioner may decide, on application by the taxpayer: Provided that the preceding provisions of this subparagraph shall not apply where the provisions of subparagraph (7) or (8) are applied. [Sub-para. (6) substituted by s. 10 (1) (b) of Act 108 of 1986 and by s. 96 of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(7) Where accurate records of distances travelled for business purposes in such vehicle are kept, upon the assessment of the employee’s liability for normal tax for the year of assessment the value placed on the private use of the vehicle, calculated under subparagraph (4), must be reduced by an amount that bears to that calculated value the same ratio as the number of kilometres travelled for business purposes bears to the total amount of kilometres travelled in such vehicle during that year of assessment.
[Sub-para. (7) substituted by s. 91 (1) (g) of Act 7 of 2010 and by s. 96 of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(8) Where accurate records of distances travelled for private purposes in such vehicle (other than a vehicle acquired as contemplated in subparagraph (4) (a) (ii)) are kept and the employee bears—
(a)
(i) the full cost of the licence for such vehicle, upon the assessment of the employee’s liability for normal tax for the year of assessment the value placed on the private use of such vehicle calculated under subparagraph (4) must be reduced by an amount that bears to the amount of the cost of the licence for such vehicle the same ratio as the number of kilometres travelled for private purposes bears to the total number of kilometres travelled in such vehicle during that year of assessment;
(ii) the full cost of the insurance of such vehicle, upon the assessment of the employee’s liability for normal tax for the year of assessment the value placed on the private use of such vehicle calculated under subparagraph (4) must be reduced by an amount that bears to the amount of the cost of the insurance for such vehicle the same ratio as the number of kilometres travelled for private purposes bears to the total number of kilometres travelled in such vehicle during that year of assessment; or
(iii) the full cost of the maintenance of such vehicle, upon the assessment of the employee’s liability for normal tax for the year of assessment the value placed on the private use of such vehicle calculated under subparagraph (4) must be reduced by an amount that bears to the amount of the cost of the maintenance for such vehicle the same ratio as the number of kilometres travelled for private purposes bears to the total number of kilometres travelled in such vehicle during that year of assessment;
the full cost of fuel for private use of such vehicle, upon the assessment of the employee’s liability for normal tax for the year of assessment the value placed on the private use of the vehicle during that year of assessment calculated under subparagraph (4) must be reduced 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 the purposes of section 8 (1) (b) (ii) and (iii).
[Sub-para. (8) substituted by s. 91 (1) (h) of Act 7 of 2010, amended by s. 101 (1) (d) of Act 22 of 2012 – date of commencement: 1 March 2013 and substituted by s. 96 of Taxation Laws Amendment Act, 2015 – date of commencement: date of promulgation of Taxation Laws Amendment Act, 2015.]
(b)
SAIT CompendIum oF TAx LegISLATIon VoLume 1 353
INCOME TAX ACT – SCHEDULES