Most clients have asked if it is possible to claim Input VAT on a company vehicle. Well, simply put, the general guide is that VAT incurred on the acquisition of a motor car is not permissible as an input tax deduction. However, there are exceptions to the general principle where an input tax deduction is allowed on the acquisition of a motor vehicle.

For the exception to apply where input VAT is allowed on the acquisition of a motor vehicle, the following can be used as a guideline:

1. Vehicles capable of accommodating only one person;
2. Vehicles capable of accommodating more than 16 persons (for example, a bus);
3. Vehicles with an unladen mass of 3 500 kg or more;
4. Caravans;
5. Ambulances;
6. Converted vehicles such as safari vehicles

Most clients in the construction field have tried to move away from purchasing double cab vehicles to Club cabs and extended cabs. The ruling is that the part of the car that carries goods must be more than the part that carries passengers.

The points to consider are not limited to what is mention above, so VAT continues to be the question that we as Glenwood Tax Consultants help our clients answer. For comprehensive information, visit the SARS website: https://www.sars.gov.za/