Jane, the owner, has asked you to provide advice on the following transaction. She is considering importing
Question:
Jane, the owner, has asked you to provide advice on the following transaction. She is considering importing a luxury vehicle with a customs value of $80,000, before GST. There will be additional importation costs of $5000, including GST. The vehicle will be 100% business use. She is unsure whether this purchase will occur in the 2021 financial year or the beginning of the 2022 financial year.
Research "working out LCT on an import" (https://www.ato.gov.au/Business/Luxury-car-tax/Working-out-the-LCT-amount/Working-out-the-LCT-on-an-import/). Calculate the LCT payable for both years and advise why this may be different in the 2021 and 2022 financial year.
After one month, if Jane advises you that the motor vehicle is actually 80% business use, how would you amend bookkeeping entries for the previous month to reflect this?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill