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Where an employer provides an employee with the right to use a motor vehicle by virtue of the employee's employment with the employer, the private or domestic use of such vehicle will constitute a taxable fringe benefit under para 2(b) of the Seventh Schedule, which is valued in terms of para 7 thereof.

This is particularly important for expatriates working in South Africa or South African residents working abroad, who oftentimes require the use of a motor vehicle where the employer or South African entity does not provide its employees with a travel allowance. SARS' Interpretation Note 72, titled Paragraph 7 of the Seventh Schedule to the Act – Right of Use of Motor Vehicle (22 March 2013) provides a valuable practical guide on this aspect.

The cash equivalent of such benefit is thus the excess in the value of private use after deducting any consideration given by the employee for the right of use of the motor vehicle. The consideration so made by the employee excludes payments made in respect of vehicle license costs, insurance costs, maintenance