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Our vehicle is currently registered in a company name. With the new entity tax, we were wondering if there is really any advantage to keeping the vehicle in a company name. Does anyone have any valid info on this topic?
Thanks
Our car, too, is registered in the name of a corporation, but we’re thinking of reversing that in view of the impending annual corporation tax.
The advantages of having the vehicle in a corporation are that liability is limited to the assets of the corporation (the vehicle itself) if you are found liable in an accident. Since we do carry the additional public liability insurance that’s offered by Mapfre, there seems to be little additional benefit to the corporate shield.
The other advantage to corporate ownership is that when it’s time to sell the vehicle, what you actually sell is the corporation that owns it and the corporation’s assets (the vehicle). Since the vehicle never actually changes hands (only the corporation does), there is no transfer tax. We lucked out with the vehicle we bought and expect to keep it a very long time, so again this transfer tax issue is largely irrelevant.
It’s my understanding that the new corporate tax law makes provision for a brief opportunity to transfer the assets from corporate ownership to private ownership without having to pay the transfer tax.
Many foreigners place their real assets in S.A.’s. If you personally do not have a lot of cash in banks or assets in your name, then there’s no reason not to put a car in your personal name. Just like in the real world, if greedy attorneys don’t find attachable assets in your name, they won’t go after you.
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