Written by Alicia
Posted 19 May 2025
If I run a small business and buy an asset like a vehicle for R200,000 (paid in full and not financed), can I deduct the full amount from my taxable income in the same year? Or do I only deduct the depreciation amount each year?
Also, do vehicles qualify for the 50/30/20% depreciation rule over three years like other small business assets?
For an asset like a vehicle purchased outright for business use, the full value isn't immediately deductible from taxable income. Instead, the business can claim depreciation over time. For vehicles, the depreciation is typically calculated over five years at a rate of 20% per year. The exact amount deductible in the first year depends on when the vehicle was purchased. If it was bought part way through the year, the 20% annual depreciation should be pro-rated based on the number of months the vehicle was used for business that year.
Please confirm if the business qualifies as a
Small Business Corporation (SBC)? If it does, you should be able to write off the entire cost of the vehicle in the first year. If not, the standard depreciation rules would apply as mentioned above.
And our calculators:
If the business qualifies as an SBC:
If it is not an SBC:
It's also important to note that depreciation can only be claimed if the vehicle is registered in the name of the business and is used for business purposes.
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and tagged Deductions, Depreciation / Wear and Tear, SARS & eFiling.
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