Page 362 - SAIT Compendium 2016 Volume1

Seventh Schedule INCOME TAX ACT 58 OF 1962 Seventh Schedule
Prelex
Wording of sub-paras. (6), (7) and (8) in force until their substitution wef date of promulgation of Taxation Laws Amendment Act, 2015
(6) Where more than one motor vehicle is made available by an employer to a particular employee at the same time and the Commissioner is satis ed that 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 direct: 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.]
(7) Where it is proved to the satisfaction of the Commissioner that accurate records of distances travelled for
business purposes in such vehicle are kept, 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, calculated under subparagraph (4), 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.]
(8) Where it is proved to the satisfaction of the Commissioner that 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—
[Words preceding item (a) substituted by s. 101 (1) (d) of Act 22 of 2012 – date of commencement: 1 March 2013; this substitution applies in respect of years of assessment commencing on or after that date.]
(a)
(i) the full cost of the licence for 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 such vehicle calculated under subparagraph (4) 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, 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 such vehicle calculated under subparagraph (4) 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, 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 such vehicle calculated under subparagraph (4) 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, 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 the purposes of section 8 (1) (b) (ii) and (iii).
[Sub-para. (8) substituted by s. 91 (1) (h) of Act 7 of 2010.]
(b)
(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 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.
[Sub-para. (8A) added by s. 103 (1) of Act 24 of 2011 – date of commencement is deemed to have been 1 March 2011. This subparagraph applies in respect of years of assessment ending on or after that date.]
(9) . . .
[Sub-para. (9) deleted by s. 91 (1) (i) of Act 7 of 2010.]
(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 [sic] 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.
[Item (b) substituted by s. 56 (1) (d) of Act 31 of 2005.]
(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—
354 SAIT CompendIum oF TAx LegISLATIon VoLume 1