Hi ATO members,
I refer to the answer from the ATO member about the maximum car cost depreciation on 30 April 2021. BlakeATO stated that the maximum income tax deduction for a car over the car limit for 2021 is $53760 ($59136 - $5376). I agree with the answer.
However, the example on the ATO website is different.
In the example,
"How GST applies......
For example, if a business is registered for GST and the vehicle cost is $60,000 GST inclusive, the maximum GST credit that can be claimed is 1/11th of the car limit ($5,376 for 2020–21 income year). The balance ($60,000 - $5,376= $ 54,624) is less than the car limit of $59,136 for the 2020-21 income year, so the business can claim a maximum depreciation amount of $54,624 in that income year."
In the example above the cost is $60k inclusive of GST. So they take the maximum amount of GST off so they get $54,624, so the business claims $54,624.
If the car is $68,816 GST inclusive, so the maximum GST that can be claimed is $5376. So the balance is $68,816 - 5376 = $63440. Because the car limit is $59,136, we cannot claim $63440, we can only claim $59,136 depreciation for the business.
Please let me know the maximum depreciation deduction for 2020-2021 the business can claim, $53760 or $59136.
If the example on the ATO website is incorrect, please remove it from the ATO website to avoid any confusion.
Thanks
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