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Teams GST on car purchase

Company information Date opened 17/10/2023
Requested by Sienna Jiang
Responded by Andrew Matthews
Number of questions 1
Reference 2002565967

Andrew Matthews - 19/10/2023

1. Yes, in those circumstances the creditable purpose percentage should be
100% and it should be possible to claim 100% of the GST (subject to the car
limit etc.).

In situations where the vehicle is held in a business entity (i.e. the company)
and is being used to provide fringe benefits the taxable purpose (creditable
purpose for GST) percentage should generally be 100%, even if the FBT
calculation could be affected by private use. From the employer's (the
company's) perspective, the vehicle is normally used 100% for a taxable
purpose (creditable purpose) in cases like this where the vehicle is provided
to an employee as a fringe benefit and they work in the entity's business
operations.

The private use is dealt with through the FBT system.

2. With respect to employee contributions, in GSTR 2001/3 the ATO looks at

the GST treatment of fringe benefits and notes that after-tax employee
contributions are generally treated as consideration for the supply of the
relevant benefit.

This would generally trigger a GST liability for the employer.

3. The base value of a car for FBT purposes (statutory method) is not
impacted by tax depreciation. That is, the car limit would not be relevant.
See the link here (Item 7.8.1).

The FBT guide at the link above also confirms that GST should be included.

So, the base value should be $88k (C) here.

Sienna Jiang - 17/10/2023

GST claim for the car purchased under the company

https://lms.knowledgeshop.com.au/member/help-desk/question/MzExNw== 1/2
20/10/2023, 13:09 Knowledge Shop Portal
1.If the company purchased a car in Aug 2023 worth $88000 (inclusive GST)
which has 20% private usage based on the logbook, can we still claim 100%
GST ***(up to the car limits) in the quarter in which the car purchased and
claim GST collected on the employee contribution in the June Qtr 2024.

Here, 100% GST *** = $6,191 (that is, 1/11 × $68,108)

Home
2. When we calculate employee contribution, if we use Statutory Method,
Help Desk what is the car's base value ? A, B, C or D
Training & development A. 88000 - 6191 = 81809
B 80000
Knowledge bank
C 88000
News & updates D 68108
E 68108-6191 = 61,917
Members
D Other amount - please advise the calculation
Teams
Thank you.
Company information
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advice and you should not act specifically on the basis of this information alone. If expert
assistance is required, professional advice should be obtained.

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