Tax Tip

If you are registered for GST you must account for GST on trade-ins or sales of all motor vehicles, including those to related parties and employees.

When you trade in a motor vehicle you are transferring ownership which generally falls within the guidelines for a taxable supply.

Therefore, you should issue a tax invoice to the motor vehicle dealer and include the value you receive on your BAS and pay the GST to the ATO.

This applies even if the vehicle was purchased prior to the introduction of the GST on 1 July 2000.