Thursday, November 23, 2017
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FAQs - Input Tax Credits

Can an entity that accounts for GST on a cash basis, pay the GST up front on a motor vehicle hire purchase and claim the input tax credits immediately?

No. The common consensus is that the hirer cannot make a lump sum payment for future GST up front and say all future monthly payments are simply the remaining GST exclusive amounts. The amount of input tax credit should simply be 1/11th of any amount paid.

Reminder - GST credits cannot be claimed for any new motor vehicles acquired before 1 July 2001.

Last Updated on Thursday, 22 August 2013 04:51
 

A car is used partly for business. Can input tax credits be claimed?

If you are not registered for GST because, for example, you are an employee, you cannot claim input tax credits. Even if you are registered for GST, you cannot claim input tax credits in respect of the use of your car for employment purposes. If you run your business as a sole trader and are registered for GST, you will be entitled to input tax credits if you use your car for business purposes.

Last Updated on Thursday, 22 August 2013 04:52
 

A GST registered businessperson uses his or her car for business purposes, however a car log book is not kept. If the alternative "set-rate per business kilometre method"is used, what is the basis for claiming the input tax credits for car expenses (e.g.

If the car is used for less than 5,000 business kilometres p.a., then a business operator can use the assumed claim percentages issued by the ATO, i.e. 5% of credits claimed if business travel between 0-1250 kms, 10% if 1251-2500 kms, 15% if 2501-3750 kms and 20% if 3751-5000 kms. If business travel exceeds 5,000 kms, the claim percentage is arrived at by dividing a reasonable estimate of business kilometres per tax period by a reasonable estimate of total kilometres per tax period.

Last Updated on Thursday, 22 August 2013 04:52
 

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