Accounting and Tax Club.co.za Q&A
Getting your VAT refund from SARS just got harder…

Find out why here
 

"Company Director buys a company car. How do we tax this?"

Our company intends to sell its company car to its non-executive directors at a price below market value. Since these directors do not receive regular income from the company, can our company be released from the obligation of recovering the tax from these directors and paying it over to SARS. How do we ensure that the directors will pay over this tax directly to SARS?

Added to
  • Allowances and deductions
  • Director tax company car
  • Sars company car tax

gronie
 User  gronie asked on 23 Oct. 2013

 

1 answer

Vote answer I appreciate this answer [0] I am unhappy with this answer [0]
Alan Lewis
 Expert Alan Lewis answered question on 01 Nov. 2013
In the event that these directors are employees of the company for the purposes of employees’ tax, this transaction would be one in terms of which they receive a taxable fringe benefit, as they receive the vehicles at less than their market value. Consequently, they would be liable to employees’ tax on the difference between the market value, and the sale price.

In the alternative, the difference in price could be seen as a donation by the company to the directors, which is subject to donations tax, which the company would have to pay.



Other questions about Allowances and deductions

 


RSS Facebook Share the experience
Accounting and Tax Club.co.za

Topics
  • Accounting
  • Allowances and deductions
  • Audit/Assessment
  • Capital gains tax
  • Dividends
  • Donations Tax
  • Exports and imports
  • Fringe benefits
  • Input tax
  • Provisional tax
  • Sars
  • Tax basics
  • Tax invoices
  • Tax returns
  • Vat basics
  • Vat registrations
  • Vat return
Premium Services
  • Company Registration
  • Objections
  • PAYE
  • Trusts
  • Turnover Tax
  • UIF
  • Wear and Tear
Our experts
KC Rottok
Annja Louca Philip Rosenberg Oliver Chanyau Adrian Miric Natalie Cousens Alan Lewis
TOP ANSWERS 2016
VAT is payable on a commercial rental and directly associated charges. Is VAT chargeable on related charges such as...[read more]
Published on 08 Apr. 2016 3 answers
When claiming input VAT on the purchase of fixed property, are you required to deduct the portion of land on which the...[read more]
Published on 22 Mar. 2016 1 answer
A client is going to service aircraft which is to a non-resident. The services will be in SA however the non-resident...[read more]
Published on 18 Mar. 2016 1 answer
We have a client that is an auctioneer and a VAT vendor. They sell animals (farms) on behalf of the seller via an...[read more]
Published on 04 Mar. 2016 2 answers
I am aware that there are requirements to make an invoice a valid tax invoice such as having the Company name,...[read more]
Published on 09 Apr. 2016 1 answer
Can fixed property within a company be counted as stock within the business and when sold it avoid paying capital gains...[read more]
Published on 03 Mar. 2016 1 answer
Video Archive Video club

Your library of Free eReports
View full library
What do I do if i disagree with SARS assessment?

Section 42 of the Tax Administration Act says you have the right to object to SARS in these 8 situations...Download your 
FREE report now