Suitable for: Anyone registered for GST who uses their car for a business purpose
Tax Difficulty: Intermediate
Airtax Experience: Repeat users
Time to read: 5-8 minutes
Claiming my car registration on my BAS
In short: To answer the question “can I claim the cost of my Car Registration on my BAS” - it depends! Car registration is charged differently depending on the state you’re in, so it’s important you consider this when you complete your BAS form on Airtax.
This article will help you decide whether or not you can claim car registration on your BAS, and also more generally show you how to apply the GST credit criteria to any expenses you’re unsure if you can claim.
Conditions an expense needs to meet in order for it to be claimable (all must be true):
- The purchase is made at least partly for your business activity, and it does not relate to making input-taxed supplies.
- The expense amount included GST.
- You have paid for the expense during the BAS period
- You have a tax invoice from the seller, for purchases over $82.50 (inc. GST)
Applying the criteria to car registration:
- Is the purchase made at least partly for your business activity? You need to register your vehicle in order to use it on our roads, so this question is actually asking whether or not you use your car for a business purpose. Some valid business purposes for a vehicle include rideshare driving, food delivery and courier services. If this does not apply to your vehicle, your car registration is not claimable on your BAS.
- Did the expense amount include GST? In order to claim GST back on a purchase through your BAS, the expense has to actually include GST. Whether or not your registration actually has GST associated with it varies depending on what state you are living in. It is very important to consider this requirement when determining if the expense is claimable.
- Have you paid for the expense during the BAS period? Assuming you are registered to report BAS on a quarterly basis, you should list expenses in the BAS period in which you actually paid for them. For example, if you paid for your car registration on the 29th of October, you should include the entire claimable amount in the October - December BAS.
- Do you have a tax invoice from the seller? This one is normally an easy one, as the vehicle registration agency should provide you with a tax invoice via email or mail.
Does my car registration amount actually contain GST?
This is where things get slightly more difficult. GST is not charged on car registration the same way across all states, so it’s really important that you make this determination for yourself based on the tax invoice you have received (if you have friends that report BAS in other states, don’t follow them blindly!).
Your car registration bill may be comprised of smaller line items, each of which has a different GST treatment.
For example, in Victoria, the total vehicle registration charge is broken up into three components:
- Registration Fee,
- TAC Charge, and
- Insurance Duty.
Generally, only the TAC charge line item includes GST, whereas the registration fee and Insurance Duty do not. Given the requirements necessary for an expense to be claimable, only the TAC Charge passes all 4 tests and should be included on the Airtax BAS.
Car registration example:
Jackie owns her own courier business, and her ABN is registered for GST purposes. She lives in Victoria, and owns a car that is used to make deliveries as part of her business. She has determined through a logbook that she uses her car 80% of the time for a business purpose. Every December, Jackie pays car registration for this vehicle and receives the following Tax Invoice.
FEE BREAKDOWN:
- Registration fee = $295.10
- TAC Fee = $474.00 (incl. GST)
- Insurance Duty $47.40
TOTAL COST = $816.50
Currently, Jackie is working on her October - December BAS and is wondering what amount, if any, she should list in her BAS for this expense. She refers to the four requirements for an expense to be claimable:
1. Is the purchase made at least partly for your business activity? Yes, she has an 80% business use percentage. Given car registration is necessary in order to use her car, this test is satisfied.
2. Did the expense amount include GST? Only the TAC Fee has GST associated with it - given by the (incl. GST) label. Therefore, this $474 amount is the only amount that passes this test. The other two line items fail this test, and should NOT be included on the BAS.
3. Have you paid for the expense during the BAS period? Jackie paid this amount in December, so she is correct in claiming this expense in the October - December BAS period.
4. Do you have a tax invoice from the seller? Yes, Jackie has the above Tax Invoice to prove this expense if she was ever asked.
Given the above, this is how Jackie would enter this expense on her Airtax BAS:
Start your BAS with Airtax today:
- Log in or sign up to Airtax
- Complete your BAS using our easy BAS form
- Alternatively, you can book a Business Assist call to speak with one of our specialists who can help you lodge your BAS confidently
