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Income Tax Act, 1962 (Act 58 of 1962)


Seventh Schedule

Benefits or Advantages Derived by reason of Employment or the Holding of any Office

6. Right of Use of any Asset (Other than Residential Accommodation or any Motor Vehicle)


1) Where an employee has been granted the right to use any asset (other than residential accommodation or any motor vehicle) as contemplated in paragraph 2(b), the cash equivalent of the value of the taxable benefit shall be so much of the value of the private or domestic use of such asset (as determined under subparagraph (2) of this paragraph for the period of use) as exceeds any consideration given by the employee for the use of such asset during such period or any amount expended by the employee on the maintenance or repair of such asset.


2) The value to be placed on the private or domestic use of such asset shall be—
a) where the asset is held by the employer as the lessee under a lease or hiring agreement, the amount of the rental payable by the employer in respect of the period during which the employee has the use of the asset; or
b) where the asset is owned by the employer, an amount calculated for the period during which the employee has the use of the asset at the rate of 15 per cent per annum on the lesser of the cost of such asset to the employer or the market value thereof at the date of commencement of the period of use: Provided that where an employee is granted the sole right of the use of the asset for a period extending over the useful life of the asset or over a major portion thereof, the value to be placed on the private or domestic use of the asset shall be the cost thereof to the employer, and in such case the taxable benefit in respect of such use shall be deemed to have accrued to the employee on the date on which he was first granted the right of use of such asset.


3) For employees tax purposes an appropriate portion of the said cash equivalent shall be apportioned to each period during the year of assessment in respect of which any cash remuneration is paid or becomes payable by the employer to the employee.


4)        No value shall be placed under this paragraph on the private or domestic use of an asset by an employee if—

a) such use is incidental to the use of the asset for the purposes of the employer's business or the asset is provided by the employer as an amenity to be enjoyed by the employee at his place of work or for recreational purposes at that place or a place of recreation provided by the employer for the use of his employees in general; or

: Provided that this item shall not apply in respect of clothing.

[Subparagraph (a) amended by section 68(1) of Act No. 17 of 2017]

b) the asset consists of any equipment or machine which the employer concerned allows his employees in general to use from time to time for short periods and the value of the private or domestic use of the asset, as determined under subparagraph (2), as does not exceed an amount determined on a basis as set out in a public notice issued by the Commissioner;

[Subparagraph (b) amended by section 95 of the Taxation Laws Amendment Act, 2015 (Act No. 25 of 2015]

bA) the asset consists of telephone or computer equipment which the employee uses mainly for the purposes of the employer’s business; or
c) the asset consists of books, literature, recordings or works of art.