Page 140 - ADVANCED TAXATION - Day 1 Slides

Calculation of output tax in respect of the use of a motor vehicle:

Step 1: Determine the value of the motor vehicle (excl. VAT and
finance charges (Determined value)

Reduce determined value: depreciation on reducing-balance method @
15% for each completed 12 months from the date which vendor first
obtained vehicle, to date when employee was granted the right of use

Step 2: Determine the consideration for the use of the motor
vehicle
• x 0.3% if input tax was denied (motor car)
• x 0.6% if input tax was claimed (any other vehicle)

Step 3: Deduct the following:

• Input tax claimed: amounts paid by the employee to the employer,
excl. finance charges and fuel

• Input tax denied: amounts paid by the employee to the employer,
excl. finance charges, fuel and fixed cost of the motor car
• R85 if the employee bears the full cost of repairs and maintenance

Step 4: x 14/114

Step 5: x taxable usage PER MONTH