FINANCE: Radical Taxation Of Company Cars
Recent Western Cape Business News
This is according to Ron Warren, Executive Chairman of payroll software company, NuQ who says that the change that will have the most effect on payrolls under the recently published Taxation Laws Amendment Bill, 2010 and the Taxation Laws Second Amendment Bill, is undoubtedly that made to the taxation of company cars, which will also make the keeping of a log book essential if the employee wishes to get any tax benefit.
Reasons for the change
Warren says that over the last few years, the rules for claiming expenses against a travel allowance have steadily become more restrictive. In the current tax year the deemed business kilometres travelled concession (those exceeding 18 000 but not exceeding 32 000 kilometres) was repealed, and taxpayers seeking to claim expenses against a travel allowance must now maintain travel log books showing actual business use.
“Similar changes are now to be required for the employer car fringe benefit,” he says.
“Both sets of rules must roughly reach the same outcome so as to prevent ‘arbitrage’, according to the explanatory memorandum on the Bill”.
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