Rev Up Your Business Savings: The Insider’s Guide to Buying an expensive Company Car in Australia

Rev up your business in Australia with a new company car! Hold onto your seatbelts as we share game-changing tax insights that could turbocharge your savings. Many business moguls down under are catching on to the tax benefits of purchasing a vehicle under the company structure. Buckle up for the ride as we break down the key tax benefits and recent legislative changes that could put you in the driver’s seat of a tax-efficient strategy.

Claiming the GST and Depreciation:

One of the main perks of buying a company car in Australia is the ability to claim the Goods and Services Tax (GST) of the car purchase, up to 1/11 of the car’s value. But that’s not all – strap in for the ride as you can also claim the car as a depreciation expense based on its estimated effective life. Imagine getting a tax break for the wear and tear on your sleek new wheels – now that’s a pit stop worth taking!

Fringe Benefit Tax: The Plot Twist

Of course, every good story has a plot twist, and in this case, it’s the Fringe Benefit Tax (FBT). When you purchase a company car, it’s subject to FBT, but fear not! Recent changes in tax legislation have given us a twist in the tale. If your chariot of choice is a full electric car, purchased under the company, you can dodge the FBT bullet. Yes, you heard that right – electric cars are the heroes of this tax-saving saga!

Luxury Car Tax Threshold: Keeping It Classy

Now, for those eyeing the crème de la crème of vehicles, be aware of the Luxury Car Tax (LCT) limits. If your dream car crosses the $70,000 mark, it falls under the LCT radar. In the financial year 2024, these limits have been cranked up to $76,950 for non-fuel-efficient cars and $89,332 for the fuel-efficient gems. Remember, this tax applies only to the extravagant, so choose wisely.

Depreciation Limits: A Reality Check

As we cruise through the financial year 2024, keep in mind the depreciation limits for your vehicle. The car limit for depreciation has been set at $68,108. So, if your business is considering a high-end purchase, ensure you stay within this boundary to make the most of your tax deductions.

In conclusion, the recent increase in the Luxury Car Tax threshold demands proactive adaptation from businesses. Seeking the expertise of professional CPAs is a strategic move to ensure compliance, maximize fiscal benefits, and navigate the nuanced terrain of luxury car taxation. Let WISTax! Rev up your business and steer towards tax efficiency with a company car purchase. But, before you hit the gas, consult with us to ensure you navigate the twists and turns of the tax landscape. Whether it’s claiming GST, maximizing depreciation, or making the most of the recent FBT exemptions for electric cars – we’ve got the keys to your tax benefits. Don’t let tax obligations put the brakes on your dreams.

luxury car tax threshold

All WISTAX today for an initial free 15-minute telephone consultation with John and his team on 1800 841 312 if you want to join our fast growing accounting franchisee business