I need some guidance related to the above. The vehicle in question has an “extended” cab but still seats two passengers only. The only difference between this and the standard single cab bakkie is that this vehicle has more storage space behind the seats.
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
A deduction of the input tax in respect of a ‘motor car’ supplied to or imported by the vendor is only permitted under the circumstances listed in section 17(2)(c)(i) – (iii). The fact that the motor cars concerned were acquired by the vendor wholly for the purpose of consumption, use or supply in the course of making taxable supplies, makes it ‘input tax’, but section 17(2) then denies the deduction thereof.
No deduction can therefore be made. See also SARS Interpretation note on this (IN82). The practice generally prevailing is that an “extended cab is a club cab as described above with two traditional full-sized doors and two smaller-sized rear doors (suicide doors) on one or both sides of the vehicle. Club cabs and extended cabs are generally used on public roads, have three or more wheels and are designed for carrying both passengers and goods.” It also stated that the “… if the length of the passenger cabin or the area available to passengers within the passenger cabin measures more than the dedicated load area, the vehicle is designed mainly for the carriage of passengers and falls within the ambit of the definition of “motor car”. Alternatively, if the dedicated load area of the club or extended cab is larger than the passenger cabin, the vehicle is constructed or converted mainly for carrying goods rather than passengers (that is, it is not a “motor car” as defined).”
No input tax can be deducted if the vehicle is a motor car as defined.