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Taxation Determination

TD 2003/18

Income tax: what is the car limit to be used for the 2003-2004 financial year?

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FOI status:

may be released

Preamble
The number, subject heading, date of effect and paragraphs 1, 2 and 3 of this document are a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and are legally binding on the Commissioner. The remainder of this Determination is administratively binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain when a Determination is a 'public ruling' and how it is binding on the Commissioner.

1. The car limit for the 2003-2004 financial year is $57,009. This limit is indexed annually in line with movements in the motor vehicle purchase sub-group of the Consumer Price Index.

2. For the 2001-02 year this index was 425.8 and for the 2002-03 year the index was 424.9 resulting in an indexation factor of 0.998, that is, less than 1. The law requires that where the indexation factor is less than 1, the car limit is not to be indexed.[F1] As a result, the car limit remains the same as that which applied in 2002-2003 financial year.

3. The car limit of $57,009 is used to calculate depreciation deductions under the income tax law.[F2]

Example

4. On 2 July 2003 a business purchases a motor vehicle for $65,009 wholly for use in the carrying on of its business.

5. In determining the depreciation that may be claimed for the 2003-2004 financial year the business is restricted to calculating the depreciation on a cost price of $57,009.

Date of Effect

6. This Determination applies to the financial year commencing on 1 July 2003.

Commissioner of Taxation
25 June 2003

Footnotes

1 Subsection 960-270(2) of the Income Tax Assessment Act 1997 (ITAA 1997).

2 Subsection 40-230(3) of the ITAA 1997. The 'car limit' is also used to set the luxury car tax threshold and is used to determine if luxury car tax is payable - see Luxury Car Tax Determination LCTD 2003/1.

Not previously released in draft form.

References

ATO references:
NO 2003/006671

ISSN: 1038-8982

Related Rulings/Determinations:

TR 92/1
TR 97/16
LCTD 2003/1

Subject References:
car limit
depreciation

Legislative References:
TAA 1953 Part IVAAA
ITAA 1997 40-230(3)
ITAA 1997 960-270(2)

TD 2003/18 history
  Date: Version: Change:
You are here 25 June 2003 Original ruling  
  11 May 2016 Withdrawn  

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