1. Purpose of Business Travel Compensation
The purpose of business travel compensation to compensate an employee who travels for business purposes and who has incurred the employer’s business travel expenses.
The purpose of business travel compensation IS NOT to:
• Assist the employee to purchase a motor vehicle. If the employer does assist, this would simply be additional salary, and fully taxable.
• Assist an employee with his private travel expenses.
Employers sometimes assist their employees with private travel expenses such as bus fares, taxi fares, etc. to enable the employee to get from home to work and back again. This assistance is not ‘travel compensation’, but it is interesting to note that while one would expect that assistance by the employer would be taxable, there are three methods available to assist employees with their private travel expenses – two are taxable, and one is not taxable.
These 3 methods available to assist employees with their private travel expenses are:
• The use of a company-owned or rented motor vehicle: This is a taxable benefit. This would be a ‘company car’. Because the use is solely for private travel, it would be taxed as normal as a company car but with no allowable deductions for business travel expenses.
• Transport allowance: This is a taxable allowance. The employer pays a cash amount for bus fares, taxi fares, etc. This ‘transport’ allowance is paid in respect of private travel and is simply an additional salary under another name.
• Transport service: This is a non-taxable benefit. The employer provides a service that takes employees in general from home to work and back again. In other words, the employer owns or rents a vehicle and employs a driver who takes the employees home after work and picks them up again in the morning from home for work as part of his duties.

11. Company Cars – Miscellaneous Matters of Interest
Company Cars plus Travel allowances
If the employee is paid a travel allowance –
1. In respect of a company car, the company car is taxed as described in the rules above, but the travel allowance is not administered as a travel allowance and is taxed in full and reported on the tax certificate as either code 3601 (salary) or perhaps better, as code 3713 (taxable general allowance).
2. In respect of another vehicle that is not a company car, then the company car is taxed as described in the rules above, and the travel allowance is taxed and reported as a code 3701 travel allowance. Business travel expenses in respect of the other vehicle can be claimed on assessment against the travel allowance.
VAT on Company Cars
The current calculation is based on a VAT regulation issued in 1991 by the Minister of Finance at the time, Barend du Plessis. This regulation is outdated and has not been aligned with the changes made to the company car provisions in the Seventh Schedule effective from March 2011.
For example, the determined value for the VAT calculation excludes VAT, whereas VAT is included for the fringe benefit calculation. Then the reduction for maintenance costs paid by the employee is based on the outdated 0,18% pm, and further, there is no provision for a reduction if the employee pays for fuel, insurance, or licence expenses.
Assuming that the employer is a registered VAT vendor, the use of a company car is deemed supply, and VAT is payable. The value of the deemed supply is generally determined with reference to the cash equivalent of the benefit. The value of the deemed supply in respect of a company car is 0,3% pm of the determined value of the motor vehicle where the employer was denied a deduction of input tax on the purchase of the vehicle (for example, a passenger motor vehicle). Otherwise, 0,6% must be used.
The VAT portion of the fringe benefit value is calculated as follows:
1. Determined value (currently excluding VAT) x 0,3% pm x 15 / 115
2. If the vehicle is a commercial vehicle, use 0,6% instead of 0,3%.
3. If the employee bears the full cost of maintaining the vehicle, the value of the VAT supply is reduced by the amount by which the value of the fringe benefit is reduced (currently 0,18%).
Typically, the monthly output VAT on a company car purchased by the employer for R228 000 (including VAT) will be calculated as R73.68 ((R228 000 x 100/114 x 0,3% ) x 15/115).
It is very important to note that the output VAT expense of R73.68 per month may be claimed by the employer as a deduction for income tax purposes.
Ensure that your accounting system allocates this to a tax-deductible expense account.

Summary of the Principles of Company Cars
1. The vehicle is owned or rented by the employer (or an associated institution).
2. When the use of the vehicle is granted to an employee, it is called a ‘company car’.
3. Company cars can be granted to employees even if the employee does not travel for business purposes.
4. The employer must:
a. Establish the determined value of the vehicle
b. Determine the correctly monthly fringe benefit percentage
c. Calculate the income value of the fringe benefit that arises for the private travel use
d. Include a percentage (100% or 80% or 20%) of the income fringe benefit value in remuneration
e. Report the income value of the fringe benefit on tax certificates.
5. The employee should:
a. Record his daily business kilometers in a logbook
b. Record his expenses if he pays the full amount towards licence, insurance, or maintenance costs
c. Record his expenses if he pays the full amount towards fuel costs
d. Claim business travel expenses on assessment by submitting his logbook details in his ITR12
e. Claim running cost expenses on assessment by submitting his logbook details in his ITR12.
Summary of the Tax calculation Principles for ‘purchased’ Company cars
1. The employer pays for all capital and running costs of the vehicle
2. The vehicle is deemed to be used for private travel only and remuneration is determined on that basis
3. Business travel expense reduction is provided for in the payroll by including only 80% or 20% of the income value in remuneration.
The fringe benefit and tax for the use of a company car is calculated and administered by –
1. Calculating the fringe benefit income value by multiplying the vehicle’s determined value by a monthly percentage
2. Including a portion of the fringe benefit’s income value into remuneration
3. Reporting the income value of the fringe benefit on the tax certificate for assessment purposes
4. Subject to a logbook and proof of running costs paid by the employee, the fringe benefit value can be reduced on assessment before the calculation of income tax.

10. Reductions to the Fringe Benefit value
There are three ways in which the income value fringe benefit value can be reduced on assessment –
1. An across-the-board reduction for business travel, calculated by reducing the code 3802 fringe benefit value by the ratio of business kilometers divided by total kilometers (from the logbook).
2. If the employee pays in full for any one or more of insurance, licence fee or maintenance expenses, the total expense incurred by the employee is reduced by the ratio of private kilometers to the total kilometers to represent the private portion of the cost, and this value reduces the fringe benefit value
3. If the employee pays the full cost of fuel of the private use of the vehicle, the fringe benefit value will be reduced by a value calculated by multiplying the SARS Cost Scale table fuel rate/km by the number of private kilometers in the logbook.
Logbook
It goes without saying that if the employee wants to reduce the income value of his company car fringe benefit on assessment, a logbook must be kept.
All of the reductions listed above are dependent on either the number of business or private kilometers.
Logbooks are therefore required for company cars, travel allowances, but not for travel reimbursements if the full amount of the travel reimbursement is excluded from income (code 3703).
If a logbook is not kept, the employee will not be allowed a reduction to the value of the fringe benefit on assessment and will have to pay to SARS the tax that was not withheld in the payroll. This will result in some very unhappy employees paying the payroll office a visit.
It is not a legal requirement, but more of a moral duty to inform your employees of the consequences of not keeping a logbook.

9. Fringe benefit ‘No value’ concessions
The fringe benefit value of the private use of a company car is deemed to be nil for two circumstances –
1. ‘Pool cars’ and
2. ‘Standby vehicles’.
‘Pool Cars’
The value of the private use of the motor vehicle by an employee is deemed to be nil (i.e., no fringe benefit value and no PAYE), if all three of the following conditions are satisfied:
1. The motor vehicle is used by employees in general for business travel and is not allocated to a particular employee, and
2. Private use of the motor vehicle by the employee is “infrequent or merely incidental to business use”, and
3. The motor vehicle is not normally kept at or near the residence of the employee when not in use outside of business hours.
‘Pool cars’ are vehicles owned or rented by the employer that are made available to employees in general (i.e., not allocated to one employee for exclusive use) for business travel during working hours.
In the normal course of events, the vehicles are used during the day for business purposes, returned to the employer during or at the end of the day, and parked at the employer’s premises while the employee travels home by his own means.
Occasionally, the day’s business trips are extended beyond normal working hours, and for practical reasons, the employee takes the pool car home.
The difficulty in applying the ‘no value’ concession is because of the rather convoluted wording of the third condition. The interpretation of this point is that the vehicle can be kept at the employee’s residence only when it has been used for business purposes outside of normal hours.
If this is the case, then the ‘no value’ concession will still apply.
Taxable Scenario
An employee has a temporary problem because his own vehicle is in the garage for repairs, and the employer allows the employee to use a ‘pool car’ to travel from work to home and back again while his car is in the garage.
In this case, point 3 is not complied with because there is no business use outside of business hours to justify the use of the vehicle to go home, yet it is used for this private travel.
Result: A pro rata portion of the fringe benefit value for a full month of the private use must be calculated.
‘Standby’ or ‘Tool of Trade’ Vehicles
The value of private use of the motor vehicle by an employee is deemed to be nil, if –
1. The nature of the employee’s duties is such that the employee is regularly required to use the motor vehicle for the performance of those duties outside normal hours of work; and

2. The employee is not permitted to use that motor vehicle for private purposes other than –
• Travelling between his or her place of residence and his or her place of work; or
• Private use which is infrequent or is merely incidental to its business use.
This ‘nil value’ concession assists the users of vehicles that are regularly used for work outside of normal working hours, and where the private use (other than from home to work), is infrequent or incidental to the business use.
Note that:
1. ‘Normal working hours’ are the hours of the employee who has the right of use of the vehicle, and can therefore vary for different employees
2. The use outside of an employee’s normal working hours must occur regularly – occasional use will not be frequent enough to constitute regular use.
The last requirement is the difficult one:
The private use (excluding travel from the usual place of residence to the usual place of employment) must be
“… infrequent or merely incidental to its business use”.
It is the employer’s responsibility to prove that the requirements for the nil value provisions have been met.

8. Tax certificate reporting
The income value of the company car fringe benefit must be reported on tax certificates.
There are two codes to differentiate between a fringe benefit calculated for the private use of a company-owned motor vehicle and the private use of a vehicle rented by the company:
1. Code 3802: “Use of motor vehicle acquired by employer NOT via Operating Lease”
2. Code 3816: “Use of motor vehicle acquired by employer via Operating Lease”
This income value will be used as the starting value for the income tax calculation on assessment.

7. Inclusion of the Fringe benefit amount into Remuneration
The income value of the fringe benefit is calculated by using one of the two formulas described above.
The legislation provides that business travel expenses can be claimed by the employee against the income value at the end of the tax year by submitting a logbook and/or proof of paying the full amount towards the running costs of the company car (explained in a section that follows).
However, the payroll needs a remuneration value to be able to calculate PAYE.
Confirming the trend to align the travel allowance and company car provisions as closely as possible, a seemingly small but very significant change was made to both the company car and the travel allowance requirements for the 2011/12 year of assessment.
From 1 March 2011, the Fourth Schedule definition of remuneration gives the employer the option to include either 80% or 20% of the income value of the fringe benefit for the private use of a company car into remuneration as a provision towards the potential deduction of business travel expenses on assessment if the company car is used for business travel.
The ‘80%/20%’ provision is worded as follows:
“Provided that where the employer is satisfied that at least 80 per cent of the use of the motor vehicle for a year of assessment will be for business purposes, then only 20 per cent of the amount of such allowance or advance must be included”.
Inclusion rate of 80%
The default (and the ‘no risk’) option for the employer is to use the 80% inclusion rate.
However, if the 80% option is used for employees who travel ‘substantially’ for business purposes, the employee will be taxed on 80% of what is in the main employer’s business travel expense. This is unfair to the employee who must wait for about 6 months into the new tax year to get a refund of the tax owed to him.
In this case, the 20% inclusion rate can be applied if it the circumstances described in the ‘80%/20%’ provision above justify its application.
Inclusion rate of 20%
There is a risk to the employer (in terms of paragraph 5 of the Fourth Schedule) of applying the 20% option when it shouldn’t have been applied. If it turns out later that more than 20% of the travel was private travel and the employer should have applied the 80% inclusion rate, penalties, and interest on the untaxed 60% portion could be an unpleasant result.
The temptation to understate the remuneration value by incorrectly applying the 20% inclusion rate is increased by the fact that remuneration is not only used to calculate employees’ tax, but also for UIF contributions as well as for the skills development levy calculations, and at some stage in the future, the Compensation Fund’s annual Return of Earnings declaration as well.
To make an informed decision on which inclusion rate to use, the employer should check the private and the total kilometer values for a recent period of the year (the longer the period, the better). Calculate the private use percentage value by dividing the private kilometers by the total kilometers, and if the private ratio is less than 20%, then the 20% inclusion rate can be safely used.
The kilometer details and the calculation should be retained in case of a query by SARS.
Inclusion rate of 100%
Many employers (and employees) prefer to tax the fringe benefit in full in the payroll, knowing that a refund will be granted to the employee on assessment for any business travel expenses.
Some employees don’t want to bother with a logbook, or even if he does maintain a logbook, would prefer to get a refund on assessment rather than having to pay SARS at the end of the year.
Paragraph 2(2) of the Fourth Schedule provides that an employer may, at the written request of any employee, deduct or withhold additional amounts of employee tax from an employee’s remuneration.
This is known as ‘voluntary’ tax in the payroll world, and it is a very valuable option to be aware of.
Employees who want to avoid an assessment payment at the end of the year, can make use of this option to pay more PAYE during the year.
Alternatively, employees may request in writing that the employer includes 100% of the income value of the fringe benefit in their remuneration.
The SARS Interpretation Note # 72 confirms that if there is no business travel, then 100% of the income value can be included in remuneration for PAYE purposes as described above.
Note: This concession only applies to the company car fringe benefit, and not to travel allowances.
‘Average’ or ‘Retrospective’ calculations
The legislation provides for only two options –
1. 80% (the default or standard rate), or
2. 20% (the concession rate for employees who travel less than 20% for private purposes.
The employer is allowed to exercise his 80%/20% choice every month should the circumstances justify it. Normally the inclusion rate would not be changed so often, but two or three changes per year because of circumstances that change, are possible.
For example, a salesman on the road for the first 6 months of the year is promoted to sales manager for the last 6 months of the year and is then mostly desk-bound. While travelling extensively for business in the first 6 months, a rate of 20% was applied. After becoming more desk-bound for the last 6 months, 80% was (correctly) used.
The mathematical result of 20% for 6 months and 80% for 6 months is that over the full year, an average inclusion rate of 50% was effectively applied.
Remember the wording of the provision in the legislation that reads as follows: Provided that where the employer is satisfied that at least 80 per cent of the use of the motor vehicle for a year of assessment will be for business purposes, then only 20 per cent of such allowance or advance must be included.
This provision clearly states that either 80% or 20% must be applied for a year of assessment.
Applying the letter of the law as it stands would mean that the inclusion rate that is valid at the end of the tax year must be applied retrospectively back to the start of the tax year by the payroll.
However, a retrospective calculation will cause problems –
1. If the first portion of the year was taxed using 20%, and the remainder using 80%, it will mean that in the final tax year end calculation, tax on 80% for the period that was initially correctly taxed on 20% will be withheld in the last pay period of the year, resulting in cash flow problems for the employee.
2. If the first portion of the year was taxed using 80%, and the remainder using 20%, it will mean that in the final tax year end calculation, the extra tax for the initial period that was correctly calculated on 80% will be ‘illegally’ re-calculated using 20% in the final tax calculation, and the tax ‘given back’ to the employee.
This is an example of the law not contemplating the reality that employees’ tax is calculated during the tax year, and not in one big ‘grab’ at the end of the tax year.
Skills Development levy and UIF contributions
The Skills levy and the UIF contribution calculations are both based on Fourth Schedule remuneration.
The higher the remuneration value (i.e., 80% or 100%), the higher the cost to the employer of these statutory fees, limited only by the UIF threshold. These two statutory payments are a cost of employment for the employer, despite their social benefits.
If the numbers are large, lower employment costs might tempt employers to place themselves at risk by applying the 20% inclusion rate when the rate should be 80%.

6. Fringe Benefit Formula: Monthly Cost plus the Cost of fuel
The number of vehicles held by employers under “operating leases” (rented) has increased.
An “operating lease” is used for moveable property (such as a motor vehicle) and its identifying elements are explained in an earlier section of this workbook, so need not be repeated.
If the vehicle is rented via an “operating lease” and the right to use the vehicle for private travel is granted to an employee, the income value of the fringe benefit is calculated as the: “Actual cost incurred under the operating lease plus the cost of fuel incurred on the same vehicle”.
Note the following:
1. The fringe benefit calculation formula is based on the premise that the vehicle will be used for only private travel purposes, and that by arrangement, the rental company and the employer pay for all running costs
2. The cash value of the fringe benefit can be reduced by any consideration paid by the employee to the employer (excluding any consideration paid for the cost of licences, insurance, maintenance, or fuel).
3. In circumstances where the vehicle is not rented via an “operating lease, the ‘Fixed percentage’ formula must be used to calculate the value of the private use.

5. Determined value
Background
Going back to pre-2014, investigations revealed that certain types of companies were benefiting from a lower determined value than the mainstream of companies, resulting in a lower private use fringe benefit value. This was unfair – two employees with identical cars should not have different fringe benefit values.
Before 2015, the types of companies that benefited from a lower determined value than other companies, were:
1. Motor vehicle manufacturers: Determined value = manufactured cost
2. Importers of Vehicle: Determined value = landed cost
3. Motor Dealers: Determined value = Dealer Billing Price
4. Rental companies: Determined value = Dealer Billing Price
The ‘Dealer Billing Price’ is the manufacturer’s or importer’s recommended selling price of motor vehicles when they sell their vehicles to motor vehicle dealers and rental companies. This is a much lower price than what a customer will pay when purchasing the vehicle from a Motor Dealer (the retail market value).
Amendments 1 March 2015 and the Regulation for Retail Market Value
Paragraphs 7(1)(a), 7(1)(b)(i), 7(1)(b)(ii), and 7(1)(c) of the Seventh Schedule define four methods of acquiring ownership of a motor vehicle, summarised as follows:
1. Acquired (paragraph 7(1)(a)): Acquired by the employer as a result of a cash purchase
2. Current Lease (paragraph 7(1)(b)(i)): Is held by the employer under an on-going financial lease
3. Paid-up Lease (paragraph 7(1)(b)(ii)): Was held by the employer under a financial lease (ownership acquired on termination of the lease)
4. In any other case (paragraph 7(1)(c)): The vehicle was not purchased but sponsored or donated to the employer at ‘no value’ by another person.
Paragraphs 7(1)(a) and (c) were amended with effect 1 March 2015 to add the concept of the “retail market value” of the vehicle that from 1 March 2015 must be used as the determined value of the acquisition of a motor vehicle.
The regulation that specifies how to determine the retail market value of a motor vehicle was published in Government Gazette No. 38744 on 28th April 2015 and was made retrospectively effective from 1st March 2015.
Its provisions were phased in over 3 years, ending with the final position on 1 March 2018 that is still in force today.
Note that vehicles rented from a bona fide rental company in terms of an ‘operating lease’ specified in section 23A(1) are not affected by the changes to the determined value definition, because the ‘determined value’ of the vehicle is not used to calculate the fringe benefit for company cars that are rented by the employer.
Explanation of the Regulation’s Requirements
The rules specified in the regulation that specifies a value to the retail market value are complex and provide for several scenarios differentiated by:
1. Employer Type:
a. Motor vehicle Manufacturer or Importer
b. Motor vehicle Dealer or Rental company
c. All other employers (who are not one of the above).
2. Vehicle Type:
a. New vehicles
b. Used vehicles.
3. Acquisition Value:
a. Purchased for a Value
b. Acquire at no cost (sponsored, donated, etc.).
Within each of the above scenarios, different sets of rules specify whether VAT must be included or excluded from the retail market value and in a few cases in the years between 2015 and 2017, whether to apply a discount percentage.
Finance charges and interest are always excluded from the retail market value.
For companies other than motor vehicle manufacturers, importers, dealers, and rental companies, by applying the regulation rules to the definition of the determined value in the Seventh Schedule paragraph 7(1), the ‘adjusted’ definition of the determined value is as follows (very much simplified):
1. The original cost of the purchase, including VAT, excluding finance charges and interest, or
2. The cash value of an ongoing lease (other than an operating lease), or
3. The cash value of a paid-up lease (other than an operating lease), or
4. In any other case (i.e., not purchased), the market value of the motor vehicle.
Comments on the ‘Original cost’ to the employer
There are some variations to the value of the employer’s ‘original cost’ to be aware of.
Add-on Items
The original cost of the motor vehicle:
• Includes the cost of add-on items such as tow bars, media players, air conditioners, smash-and-grab window tinting and security alarms
• Does not include the cost of insurance products such as the monthly service fee for vehicle tracking or roadside assistance.
Consideration Paid by the Employee
Employees sometimes contribute towards the original cost of a motor vehicle.
For example, employers sometimes place a limit on the cost price of the motor vehicle but allow the employee to select a motor vehicle that exceeds that limit on the basis that the employee contributes the difference between the full cost price of the motor vehicle and the limit set by the employer.
In these circumstances when determining the ‘original cost’, the employer may deduct the employee’s contribution from the full cost price of the motor vehicle.
This means that by contributing financially, the determined value is reduced and the monthly fringe benefit value that the employee is taxed on will be reduced accordingly.
Motor Dealers and Motor vehicle Rental Companies
It is common practice that employees of motor dealers in new and used motor vehicles and employees of employers in the motor vehicle rental industry use several ‘company cars’ from the dealer floor for relatively short periods.
In these circumstances, SARS accept that the cost of the motor vehicle used is equal to the average cost of all stock in trade or rental vehicles on the dealer floor at the end of the immediately preceding year of assessment of the employer as an alternative to determining the actual cost of the particular motor vehicle used during each period.
The method of calculating the average cost must be appropriate to the dealer’s circumstances.
For example, if the dealer sells new and used motor vehicles but employees are only allowed to use used motor vehicles, then the average cost of the used motor vehicles on the floor must be used as the ‘determined value’.
The average cost of a motor vehicle may not be used if a specific employee is granted the right of use of a specific motor vehicle or if the right of use of a motor vehicle has been granted to a specific employee as a reward for performance or a motivational tool.
SARS is also of the view that an employee, who has been granted the right of use of a motor vehicle for a period of time which is not considered to be ‘short’, will have been granted the use of a specific motor vehicle.
It appears that one week is seen to be a ‘short’ period, whereas one month is seen to not be a ‘short’ period.
SARS will consider the facts of each case when deciding whether the period that the employee has the use of a particular motor vehicle is ‘short’.
Depreciation of the Determined Value
The determined value of the motor vehicle can be reduced if the employee is granted the right of use of the motor vehicle 12 months or more after the employer first acquired the motor vehicle or the right of use thereof.
The reduction is by means of a depreciation allowance of 15% according to the reducing-balance method for each completed 12-month period from the date the employer acquired the motor vehicle.
The determined value of a company car can be depreciated according to specific rules.
The depreciation is calculated according to the reducing balance method at 15% for each completed 12 period between:
1. The date when the employer first acquired the vehicle or obtained the use of the vehicle, and
2. The date that the employee was first granted the right of use of the vehicle.
Note the importance of the word “first” when applying the depreciation calculation.
The important part of the depreciation calculation to be aware of is that the determined value can only be depreciated when the use of the car is moved from one employee to another.
Note that the value of the initial determined value including VAT is depreciated.

4. Fringe Benefit Formula: Fixed Percentage per month x Determined value
The components of the fixed percentage formula for the calculation of the fringe benefit value for company-owned vehicles are now discussed in more detail:
The ‘Fixed percentage’
The default value of the ‘fixed percentage’ is 3,5% per month. It can be reduced to 3,25% if the motor vehicle:
“… was the subject of a maintenance plan when it was acquired by the employer”.
Firstly, a ‘service plan’ is not a ‘maintenance plan’ and if there is a service plan, the fixed percentage is 3,5% pm.
A maintenance plan:
1. Is a contractual obligation undertaken by the provider in the ordinary course of trade with the public
2. Underwrites the costs of all maintenance (other than top-up fluids, tyres, or abuse of the motor vehicle)
3. Must be for or a period of at least three years or a distance of 60 000 kilometres, whichever comes first.
Secondly, it is important to note the following:
1. The maintenance plan must commence at the same time that the motor vehicle is bought by the employer. If the maintenance is either a ‘top up’ or an ‘add-on’ plan, then the vehicle is not the subject of a maintenance plan when the vehicle was acquired, and the monthly rate of 3,5% must be used.
2. However, once a valid maintenance plan expires, the monthly rate of 3,25% that was legally used during the period of the maintenance plan, can continue to be used.
Use of a Company car for Part of a Month
In this context, a ‘month’ is a ‘calendar month’, defined in the Income Tax Act to be any one of the 12 portions into which a calendar year is divided.
The fringe benefit value for the private use of a motor vehicle must be calculated for each month or part of a month during which an employee was entitled to use the motor vehicle for private purposes.
If the employee was only entitled to use the vehicle for part of a month, the fringe benefit value must be apportioned according to the number of days that the employee was entitled to use the motor vehicle in that month.
This means that if an employee is only granted the right to use a motor vehicle for the first time in the middle of a month (for example, 15 June), the fringe benefit value must be apportioned by dividing it by 30 days (for June) and multiplying by 15 days of entitlement to use the vehicle.
However, the fringe benefit value may not be reduced if, for whatever reason, an employee who is entitled to use the vehicle but does not use the motor vehicle for private purposes for a temporary period, unless the vehicle is returned to the employer so that its use can be allocated to another employee.
Employee is granted the Use of more than one Company car
If the use of more than one vehicle is granted at the same time to an employee, and each vehicle is used primarily (mainly) for business purposes, then the highest fringe benefit value is used for all of the vehicles.
Note that a logbook must be maintained for each vehicle to substantiate that each vehicle is used primarily for business use (i.e., more than 50% of the total distance travelled with each vehicle is business use).
If each vehicle is not used primarily (mainly) for business purposes, then the use of that vehicle is taxed as normal as though it is used for private travel purposes.
Use of the same Company car by more than one Employee
When an employer grants the right of use of a motor vehicle to an employee, the result is that a taxable fringe benefit must be raised for private travel use.
If the employer grants the right of use of the same vehicle to more than one employee, then in principle both employees are subject to fringe benefit tax on the full value of the vehicle.