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Output VAT on the “trading-in” of a vehicle

09 December 2014   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: A company trades in an existing bakkie for a new bakkie. Do I have to issue a tax invoice and pay the VAT over to SARS for the traded-in bakkie? The company is a sales company for mining products it has no affiliations with motor vehicle trade.

A: We assume that the company is registered as a vendor and used the bakkie for the purposes of making taxable supplies (input deducted).  The fact that the company doesn’t trade in vehicles is irrelevant as the bakkie is not a motor car as defined in section 1(1) of the Value-Added Tax Act.  

The trade-in by the vendor (company) is a taxable supply and a tax invoice must be issued for the value placed on the vehicle.  

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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