Question#1: What if the employee wants to buy the car from your company after their right to use it as a company car has come to an end?
If your company sells the car to her at market value, or at the depreciated value, then she won't have a tax
But if your company sells the car at a price below the market value, then this is a taxable fringe benefit, and so she'll be taxed on this.
Question#2: If your company buys a company car on behalf of an employee, and
Can you really afford not to be 100% sure about every input tax claim you submit?
vendors make one of two big mistakes when claiming their input tax
1. Don't know about certain input tax
deductions which SARS allows, and then lose out on important cash flow savings for the business; or
2. Claim when they shouldn't and face SARS penalties and assessments!
Don't make the same mistake. Here's how to be 100% sure about all your input tax claims
she they pay s you back for it, is there tax saving here?
In the case of a financial lease, the lease will be registered in the employer's name, and so it's owned by the company and remains a company car, irrespective the intention that they employee will buy the car from the company.
If the company pays the premium on the employee's behalf, and recovers the premium from her without giving her a benefit, then she won't be taxed on this. This is because the premium would be as though the employee had paid it off herself.
Question#3: Can a VAT input tax deduction be claimed for a station wagon?
Yes, you can because a station wagon doesn't all under the definition of a 'motor vehicle'.
In other words, you can't claim an input tax
deduction for any car your company buys. But a station wagon doesn't fall under the definition of a 'motor vehicle', in the VAT Act. And so you can claim input tax
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