What tax implications apply for car leasing?
GST is charged on both the monthly lease rental and on the residual value at the end of the lease. If registered for GST you can claim some or all of the GST contained in the lease rental and the residual value as an input credit for your next Business Activity Statement.
Where the amount financed is below the Depreciation Limit you can claim the lease rental as a tax deduction. If above the Depreciation Limit, interest charges on the lease and depreciation up to the value of the Depreciation Limit can be claimed.
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