FIRSTMATE BLOG: CAPTAINS LOG

Tax Treatment of Vehicle Reimbursement16.07.2014

Question
A shareholder uses their private vehicle 60% for business use, what is the tax treatment of their vehicle reimbursement?

Can he be reimbursed for his interest expense on the loan used to purchase the vehicle?

Can he claim the business portion of the GST on the purchase of the vehicle in the company?

Answer
The company may reimburse the shareholder for the business portion of the motor vehicle related expenses incurred by the shareholder. This amount can include an interest component, where the shareholder has borrowed money to purchase the vehicle.

No, the company cannot claim any GST in relation to the shareholder’s purchase of the vehicle.

If you are an employer see here for further information.

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