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Car allowance calculation

Posted 10 May 2016

Adele said:
10 May 2016 at 11:53

How is the car allowance calculated if the car cost the business R165 000 (excluding VAT) when it was bought last year (tax year ending 28 Feb 2015) Purchase price did not included a maintenance plan and the employer expected him to use the car equally for business and private. Monthly value of the use of the car for tax is 3. 5% of VAT inclusive cost of the car.

TaxTim Nicci TaxTim Nicci said:
10 May 2016 at 16:02

Car allowance is based on the cost plus VAT x 3.5% (without maintenance) x number of months.

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