From March 2015
- The value to be used as the determined car value is the retail market value as determined by the Minister in a regulation. This paragraph is only applicable to vehicles acquired or manufactured from March 2015.
- Maintenance plan is now defined as a contractual obligation undertaken by a provider to underwrite the costs of all maintenance of that motor vehicle, other that costs related to top-up fluids, tyres and abuse of the vehicle. The obligation is for at least 3 years and 60000 kilometres from the date the provider undertakes the contractual obligation, and may terminate when either condition is met.
Depreciation Calculation and Calculating the New Determined Car Value
Determined car value = Determined car value – depreciation value.
Depreciation value = Determined car value * 15%
Example 1:
Company acquires a car on the 01/03/2016 for R150,000.00.
The employee A, gets the use of the car on 01/04/2017.
Full 12 month period has passed since the employer has acquired the assets and the employee has use of the company car.
Therefore, depreciation must be taken into account.
Determined car value = determined value – depreciation
= 150000 – (150000 * 15%)
= 150000 – 22500
= R 127500
Example 2:
If employee A in the above example uses the car for one year and now employee B acquires the use of the car on 01/04/2018.
Since this is the first time employee B has acquired the use of this company car and two full years have passed since the company acquired the vehicle, two full years depreciation must be taken into account.
Determined car value = determined value – depreciation
Year 1
= 150000 – (150000 * 15%)
= 150000 – 22500
= R127500
Year 2
= 127500 – (127500 * 15%)
= 127500 – 19125
= R 108375
Example 3:
If employee B uses the car for a year, and the company car is given back to employee A to use from 01/04/2019. No further depreciation will take place for employee A, and the original determined car value calculated for employee A will still be used as the determined car value.
Employee A determined car value = R 127500.00
