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Claimability of VAT on Company Car

id : 41   cat : Value Added Tax   
Can one claim vat on a company car that's not commercial. Eg directors car?
Asked by : Nganga Mwangi
 DOQ : 2016-06-12 21:00:00
   Nganga Mwangi


VAT on MV :
INPUT tax on purchase of PASSENGER CARS & MINI-BUSES including repair & maintenance has NEVER been allowed by both the repealed VAT Act (cap 476) and the new VAT Act 2013 unless primarily used in the supplying of taxable goods or services or stock in trade.
VAT on MV : In the repealed Act (cap 476) we used to talk of the " STOP ORDER" However, VAT 2013 incorporated the stop order into PART VI s.17(4).
VAT on MV : Cap 476 (par. 2(2(1d)) repealed Act) has a window for INPUT tax on modified vehicles to be allowable with the commissioners approval. This repealed Act does not define "business" as well. Hence alot of businesses would use this loop hole to claim input tax. Attached find an extract of part IV s.17(4). This I hope answers both the issue of excess input tax and VAT on sale of passenger cars & mini buses. link
>vat on company car
. ...correction it should be part VI. Also note the word "exclusively" is in relation to passenger cars & mini buses only.
Answered by : Maneno
 DOA : 2016-06-13
Thank you CPA John, I have previously worked with an LTO company which claimed ALL the VAT incurred. Any KRA vat audit would shock them big time!
   Vincent Ongera    Vincent Ongera  2016-06-16 21:00:00
Note VAT is only claimable if a vehicle is used to sell vatable goods
   Henry Waridi    Henry Waridi  2016-06-13 21:00:00
I think vat is not allowable on company vehicles if its not used exclusively for business be it commercial or private... CPA John, is this true?
   Lynette Odongo    Lynette Odongo  2016-06-12 21:00:00

Other Answers


I think the claim is valid since it's a company owned car whether it's commercial or not
 votesDOWN : 0    votesUP : 0
: Vincent Ongera  DOA   2016-06-12 21:00:00

my Suggested answer
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