Johannesburg, 18 Feb 2011
It is important for companies to keep track of any developments around tolling that may be mentioned in the upcoming budget speech, as some tax implications of the new toll fees, which will shortly become payable in Gauteng, may potentially affect both individuals and companies.
One potential impact on the tax administration of a company is on the VAT side. In principle, companies and VAT registered individuals are entitled to claim back any VAT incurred on toll fees associated with their enterprise. However, the documentary requirements for such claims are still unclear at this stage.
VAT on toll fees incurred by drivers of large commercial vehicles would usually be claimable in full, since such vehicles would usually only be used for commercial purposes. However, toll fees on passenger cars may relate either to business or to private travel. This means that the documentary requirements in this scenario are potentially more complicated.
In practice, it seems likely that VAT will generally be claimable by a company on an amount corresponding to toll fees associated with business travel claims by its employees. However, the documentary proof underlying these VAT claims may well comprise documentation (specifically toll fee statements) in the name of the individual rather than the company. It will also be important to review the form of such statements and determine whether they are tax invoices for VAT purposes.
“Of course, at this stage, this is all fairly speculative since full details of the administrative aspects of the new tolling system, as well as the precise amounts of toll fees, are not yet known. Once further details of the new system become available, companies should carefully assess the potential impact on their tax administration system and plan accordingly,” cautions Billy Joubert, Tax Director.
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