Definition of motor vehicles for GST purposes
The term motor vehicle (for GST purposes) means a motor-powered road vehicle.
For GST purposes, a car is a motor vehicle designed to carry a load of less than one tonne and less than 9 passengers. The term car does not include a motorcycle or similar vehicle.
For GST purposes, a motor vehicle does not include a road vehicle where both of the following apply:
- The main function of the vehicle is not related to public road use.
- The vehicle’s ability to travel on a public road is secondary to its main function.
Examples of such vehicles include road rollers, graders, tractors and earthmoving equipment.
GST when purchasing a motor vehicle
If you use a motor vehicle solely in carrying on your business and you're registered for GST, you’re generally entitled to claim a credit for the GST included in the price of the vehicle, provided you have a tax invoice. There are rules for luxury car purchases, leased vehicles and purchasing second-hand. See Purchasing a motor vehicle.
GST when disposing of a motor vehicle
You need to account for GST when you dispose of a motor vehicle if the disposal is a taxable sale. There are rules for luxury cars, trade-ins, disposal to an associate and disposal by a charity.
You may be entitled to a ‘decreasing adjustment’ (reduced GST payment) for the business use element if the vehicle was used for both business and private purposes, and for vehicles used for making financial supplies.
You may need to make an ‘increasing adjustment’ if you continue to hold a motor vehicle after your GST registration is cancelled. To work this out, see Motor vehicles held when your GST registration is cancelled.
GST issues register
For more information and guidance, see:
- Motor vehicle industry partnership – for guidance on issues identified during industry consultation in the past
- GST issues registers – for issues from the GST issues registers that are not public rulings.
- Public rulings – for issues from the GST issues registers that are public rulings.