• Input tax credits

    20/12/00

    What are the GST implications for LPG and petrol?

    Non-interpretative - straight application of the law.

    LPG and petrol are subject to GST from 1 July 2000. The actual impact on pump prices was influenced by the government's planned reductions in the current fuel excises. Taxi drivers are able to claim an input tax credit for the GST included in the price paid for fuel.

    27/10/03

    Are there other costs to drivers that include GST?

    Non-interpretative - straight application of the law.

    Most business expenses paid by taxi drivers include GST after 1 July 2000. In most cases, the driver is able to claim an input tax credit for the GST included in the price of those expenses. If a driver makes a purchase that is partly for business and partly for private use, he or she is entitled to a proportionate input tax credit. For example, a driver who decides to buy a computer for $2,200 (including $200 GST) to keep track of his shift takings and business acquisitions is entitled to claim a full input tax credit of $200 if the computer is used solely for business purposes. If the computer is used 60% for business purposes and 40% for private purposes, the claim for the input tax credit is reduced to $120 which is 60% of $200. An input tax credit cannot be claimed if no GST was included in the price of the business acquisition. The Treasurer has determined that there is no GST on many Australian taxes, charges, fees and levies including driver's licenses, vehicle registrations, levies on compulsory third party insurances, taxi plates and traffic infringement fines.

    As a rule, a taxi driver can claim as an input tax credit, the GST included in any business expense excluding expenses of a private or domestic nature. This excludes a taxi driver from claiming an input tax credit for the GST included in the price of a prepared meal consumed during a shift, for example.

    01/07/08

    If I purchase a taxi cab, am I entitled to full input tax credits?

    Non-interpretative - straight application of the law.

    The car depreciation and luxury car tax limit was $57,180 for the 2009-10 financial year.

    For the 2010-11 financial year, the car depreciation and luxury car tax limit increased to $57,466.

    For example, if you purchased a new vehicle on 1 September 2009 for an amount in excess of the car depreciation and luxury car tax limit, (say for $66,000 - excluding luxury car tax), you can only claim an input tax credit of $5,198 (one-eleventh of $57,180) rather than the $6,000 input tax credit available under the normal rules.

    If you purchase a second-hand taxi cab, then you are entitled to input tax credits only if you bought the cab from an entity which is registered for GST.

    The fuel efficient car limit is $75,000 for the 2009-10 financial year. A fuel efficient car is a car that has a fuel consumption not exceeding 7 litres per 100 kilometres. Luxury car tax does not apply to fuel efficient cars under the fuel efficient car limit. It should be noted that the maximum input tax credits able to be claimed does not change because of the fuel efficient car limit, and therefore is also capped at a maximum amount of $5,198 as explained above.

    27/10/03

    If I am not entitled to claim input tax credits on a purchase, can the full amount of the purchase still be claimed as an income tax deduction?

    Non-interpretative - straight application of the law.

    Normally, a taxi driver is entitled to input tax credits for purchases that they make for their business. If you are entitled to claim an income tax deduction for the purchase under the normal income tax rules, you cannot claim an income tax deduction for the GST included in the price of an acquisition. The deduction is limited restricted to the GST-exclusive price.

    However, there may be limited circumstances where you are not entitled to input tax credits for the GST included in the price. In these circumstances, you are allowed an income tax deduction for the GST-inclusive price provided that you are allowed to deduct the expense under normal income tax rules.

    01/07/08

    When am I required to give a tax invoice?

    Non-interpretative - straight application of the law.

    You are only required to give a passenger a tax invoice if you are requested to do so and the fare, including GST, exceeds $82.50. The GST Act allows you 28 days to supply a tax invoice if it is requested. In the taxi industry, it is most practical if you issue a tax invoice at the conclusion of the journey for which it is required. It will only generally be a registered business who requests a tax invoice and you are not be required to issue a tax invoice unless the GST inclusive fare exceeds $82.50.

    27/10/03

    Is there a penalty for failing to give a tax invoice when required to do so?

    Non-interpretative - straight application of the law.

    If you do not issue a tax invoice when required you are liable for a penalty.

    01/07/08

    If I do not give a tax invoice immediately, will the 'No ABN Withholding' apply to the fare?

    Non-interpretative - straight application of the law.

    Under the new PAYG system, if an enterprise supplies goods or services to another enterprise and does not quote an ABN, the enterprise that receives the goods or service is required to withhold tax from the payment to the supplier.

    As mentioned above, a taxi driver has up to 28 days to issue a tax invoice after being requested. If a driver does not, or cannot, issue a tax invoice immediately, he or she should quote their ABN to the business passenger (passenger who is carrying on an enterprise) when it is requested. It is the inability to quote an ABN to another enterprise that gives rise to the 'No ABN Withholding' rules, not the refusal or inability to issue a tax invoice immediately. In any event, the 'No ABN Withholding' rules only apply to fares that exceed $82.50 (including GST).

    If a business passenger (or passenger who is carrying on an enterprise) does have to withhold 46.5% of the fare under the 'No ABN Withholding' rules, the enterprise that withheld the amount is required to issue you with a payment summary at the time of payment or as soon as practicable thereafter. You are entitled to claim this withheld amount (as evidence by the payment summary) as a credit when you lodge you income tax return after the end of the income year.

      Last modified: 19 May 2015QC 16403