This Tax Bite covers three specific questions that have been raised in recent months. It should be read in conjunction with our other Tax Bites regarding Travel Allowances, Car Allowances, Company Cars and Pool Cars:
- Adding items of value to a company car after the initial costs have been determined for Fringe Benefit Tax purposes.
- Determining the Fringe Benefit value regarding the use of Pool Cars.
- Converting a Pool Car into a permanent company car which is then provided to an employee.
Additions to a company vehicle such as canopies, roof racks, etc. could carry a fringe benefit – and thus result in a tax implication for the employee, which needs to be recorded correctly for SARS purposes.
Employers need to bear this in mind when additions are added to company vehicles after they were initially purchased – as it’s not as simple as one would think.
Determining the correct tax implication is very important to ensure:
- compliance by the employer and,
- minimal tax implications for the employee, both monthly and on assessment, and,
- that the correct codes on the Tax Certificate are used.