Do you use your Car for your business?

From 1 July 2017 the following car threshold amounts apply for luxury cars:

Income tax

The car limit for 2017 -18 is $57,581.

If you buy a vehicle costing more than $57,581 your business use car claim for depreciation is limited to the car limit.  You use the car limit that applies to the year you first use or lease the car.

Luxury car tax

From 1 July 2017 the luxury car tax threshold for luxury cars increased to $65,094.

The threshold for fuel efficient luxury cars for the 2017–18 financial year remains at $75,526.

The value of a car can include the value of any parts, accessories or attachments supplied or imported at the same time as the car.

Goods and services tax (GST)

Not only is depreciation limited to the car limit, but so is the GST credit you claim back from the ATO.  At most you would only be able to claim back a GST credit of one-eleventh of the car limit amount.

Plus you won’t be able to claim a GST credit for luxury car tax you pay when you purchase a luxury car, regardless of how much you use the car in carrying on your business.

Contact Us for further information.