What are a Commercial Hire Purchases 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, but no GST is charged on the monthly repayments or on the balloon (residual) payment. Customers who are registered for GST on an Accruals basis can generally claim the GST contained in the purchase price of the vehicle as an Input Tax Credit on their next BAS. Please note that this information is of a general nature only. You should consult an accountant to obtain information specific to your situation.
