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New Motor Vehicle Table

16 March 2012   (0 Comments)
Posted by: SAIT Technical
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New Motor Vehicle Table

by Michael Stein

The Minister of Finance has published new rates to be used for the purposes of the travelling allowance under s 8 of the Income Tax Act (see GN 140 Government Gazette 35064 of 24 February 2012). They replace the rates published in 2011 and apply with effect from 1 March 2012.

You are required to reduce the amount of the fixed cost according to the first table when you have used the vehicle for business purposes for less than a full year.The value of the vehicle for the purposes of the table is:

•  If the vehicle was acquired by you, the employee, under a bona fide agreement of sale or exchange concluded by parties dealing at arm’s length, the original cost of the vehicle to you, including sales tax or value-added tax but excluding finance charges or interest payable on account of the acquisition of the vehicle.

• If the vehicle is held by you under a lease regarded as an ‘instalment credit agreement’ for value-added tax purposes or was held by you under such a lease and was acquired by you on the termination of the lease, the cash value of the vehicle for value-added tax purposes. (When value-added tax was paid, it will have been included in the cash value of the vehicle.)

• In any other circumstances, the market value of the vehicle at the time you first obtained it or the right to use it plus any sales tax or value-added tax that would have been payable by you at that time on its market value.

Under the optional alternative basis, the ‘per-kilometre basis’, which may apply only if the distance travelled on business during the tax year – whether in a single vehicle or in more than one vehicle – does not exceed 8 000 kilometres and you have received no other allowance or reimbursement for the vehicle apart from the ‘per-kilometre’ reimbursement, for example, a fixed monthly allowance, the cost is determined at R3,16 per kilometre.

To access the table, click here



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