We have a novated lease arrangement for a luxury car with an employee. The purchase price is $71,200, which exceeds the luxury car depreciation cost limit.
Under tax law, any novated lease vehicle with a market value above the luxury car limit must be treated as a loan transaction for income tax purposes only. This means the employer claims depreciation and interest on the deemed loan, rather than deducting lease payments.
Given this tax treatment, does it mean the company is also required to apply lease accounting under accounting standards and recognize a right-of-use asset and lease liability on the balance sheet?
404 views
404 views1 replies
1 replies
404 views
1 replies