General treatment of disposal of motor car used in a business

The output tax considerations affecting the disposal and use of a motor car depend on whether:

1input tax was charged on the purchase; and

2any of the input tax was reclaimable.

Depending on this:

1VAT chargeable on a subsequent sale is based on the full value of the supply;

2VAT chargeable on a subsequent sale is based on the difference between the buying and selling price; or

3the sale is exempt from VAT.

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