Cars and tax
Cars and tax
From 1 July 2021 the following car threshold amounts apply.
Income tax:
- There’s an upper limit on the cost you use to work out the depreciation for the business use of your car or station wagon (including four-wheel drives). You use the car limit that applies to the year you first use or lease the car.
- The car limit for 2021–22 is $60,733.
Goods and services tax (GST):
- Generally, if you purchase a car and the price is more than the car limit, the maximum amount of GST credit you can claim is one-eleventh of the car limit amount which in 2021–22 is $5,521.
- You can’t claim a GST credit for any luxury car tax you pay when you purchase a luxury car, regardless of how much you use the car in carrying on your business.
Luxury car tax (LCT):
- From 1 July 2021 the LCT threshold will increase to $ $69,152.
- The LCT threshold for fuel efficient cars will increase to $79,659 for the 2021–22 financial year.
- Remember, the LCT value of a car generally includes, the value of any parts, accessories or attachments supplied or imported at the same time as the car.
Find out about:
https://www.ato.gov.au/Newsroom/smallbusiness/Lodging-and-paying/Cars-and-tax/?sbnews20210616
