FAQ: What are the tax & GST implications of a Commercial Hire Purchase?

What are a Commercial Hire Purchase's tax & GST implications?

Under a Commercial Hire Purchase, tax deductions may be available when the vehicle is used for business (income producing) purposes.

Generally, under a Commercial Hire Purchase tax deductions can be claimed for depreciation on the vehicle (up to the Depreciation Limit), and interest charged on the loan.

With a Commercial Hire Purchase, GST is charged on the purchse price of the car, and also on any term charges or fees.

Customers who are registered for GST on an Accruals basis or Cash basis can claim the GST contained in the purchase price of the vehicle as an Input Tax Credit on their next BAS.