Vehicle tax treatment is where good purchases become expensive ones. This is the plain-English version, and it is general information rather than tax advice.
GST credits and the car limit
GST-registered businesses can generally claim the GST credit on a vehicle used in the business, but the claim is capped by the car limit set each financial year.
The same limit caps the depreciable cost, which is why the deductible portion of a prestige vehicle is often much smaller than owners expect.
Depreciation and instant write-offs
Vehicles are generally depreciated over their effective life, with small business pooling and any current instant asset write-off measures potentially available.
These thresholds change between budgets. Confirm what applies in the year the vehicle is first ready for use, not the year it was ordered.
Logbooks and business use
A valid logbook covering twelve continuous weeks establishes your business-use percentage and can be relied on for several years if circumstances do not change.
Without one, your claim defaults to a far less generous method. It is the cheapest tax work available to a business owner.
FBT and concessions
Where a vehicle is available for private use, FBT generally applies. Certain commercial vehicles with limited private use, and eligible electric vehicles, receive concessional treatment.
Those concessions can swing the total cost between two shortlisted vehicles by a significant margin, so they belong in the decision from the beginning.