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So you just bought a minibus for business purposes... Can you claim input tax on it?

by , 10 June 2014
Let's say, you run a Vat registered business. And despite the tough economic times, your business is doing quite well. So you decide to buy a minibus for business purposes to deal with your day-to-day operations better.

You're now wondering if you can claim input tax on it so you can put some money back in your pocket.

Read on to find out whether or not you can claim input tax on a minibus you use for business purposes.

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Want to know if you can claim input tax on a minibus you just bought for business purposes? Here's the answer….

No! You can't claim input tax on your minibus.

The Practical Vat Loose Leaf Service explains that Vat law says you can't claim the Vat you paid on the purchase or rental of any motor vehicle as input tax.

In terms of the Vat Act, a motor vehicle is any vehicle that:

  • Has three or more wheels;
  • Is normally used on public roads;
  • Is constructed or adapted for carrying passengers;
  • Weighs less than 3 500 kg (unloaded); or
  • Is constructed to carry less than 16 passengers.

SARS is very clear that you can't claim the input tax on a minibus even if you use it in your business in the course of making taxable supplies.

If you try to claim input tax on your minibus, SARS will reject your claim and it can penalise you for claiming input tax you aren't entitled to.

Just to be on the safe side, take a look at the other motor vehicles SARS won't let you claim input tax on.
 

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You can't claim input tax on a minibus you just bought for business purposes and on these four motor vehicles

  1. Double-cab vehicles
  2. Normal sedan-type passenger vehicles
  3. Station wagons
  4. Sports utility-vehicles (SUVs)

Now that you know you can't claim input tax on your new minibus, make sure you comply.

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