Join Australia's most dynamic and respected property investment community

GST for car expenses

Discussion in 'Accounting & Tax' started by bez23, 10th Jan, 2016.

  1. bez23

    bez23 Well-Known Member

    19th Jun, 2015
    Hi guys,

    I use my car for business purposes (90%~). I know for yearly tax calculation, we approportion 90% for all expenses. However, when it comes to GST (BAS), do I claim the whole 100% or do 90% as well.

  2. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent Business Member

    24th Jun, 2015
    1. Estimate the portion of your purchase you intend to use for private purposes and reduce the amount of GST credit you claim on your activity statement by this amount.
    2. If eligible, you can claim a GST credit on your activity statement for all the GST included in the purchase price and later make a single annual increasing adjustment to account for the private portion of all business purchases. This is called annual private apportionment.
  3. And when the car is sold / traded-in there is also a adjustment made to reduce the GST on the sale. And it's not as simple as being 90%. Instead, the GST on the sale is reduced by the amount of the GST that was not claimed (ie 10%) on the original acquisition. This can often see the GST being paid as far less that 90% of the trade in / sales value. GST only applies to the extent a item is creditable. ... Private use discounts the GST in all cases.

    Its very important that a logbook is available that confirms the 90%. Not a guestimate. For the 2016 year the logbook method and the cents per Km are the only methods.
  4. Daniel Taborsky

    Daniel Taborsky Well-Known Member

    10th Nov, 2015
    Perth, WA
    Is fringe benefits tax (FBT) being paid in respect of the personal use of the car? It sounds like it isn't, but if it was, you may be able to claim 100% of the GST.