Section 11(e) allows for depreciation of a motor vehicle over 5 years. One of our clients who is a sole proprietor wants to purchase a new bakkie which will be used for both business and personal use. He is currently using the deemed kilometres calculatio
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
As the taxpayer concerned is a sole trader we fail to see how the double deduction will arise. We don’t know what you mean with “the deemed kilometres calculation”. It is possible that you are referring to the costs published by the Minister in the (annual) Regulation. These are not available to a sole trader. The sole trader must base the deduction on actual costs (section 11(a), (d), (e) and 24J) and make an adjustment in terms of section 23(g) for the private use element.