BDO 2025 Automotive year-end tax bulletin

Key takeaways

Leverage the $20,000 instant asset write-off

The extension of the $20,000 instant asset write-off to 30 June 2026 presents a valuable opportunity for automotive businesses to invest in qualifying assets such as diagnostic tools, workshop equipment, and IT systems. To qualify:

• Assets must be acquired and installed ready for use by year-end
• This measure supports cash flow and capital planning, particularly for small and medium-sized dealerships and service centres.

Consider timing purchases to maximise deductions and align with operational needs.

ATO focus on used and demonstrator vehicles

The ATO has reiterated its position on the valuation of used and demonstrator vehicles:

• Used vehicles must be valued based on the total value given to the customer, including any over-allowance on trade-ins
• Demonstrator vehicles require independent valuation; dealer guides are not accepted
• Spare parts inventory and obsolete stock should be reviewed and documented through a full stocktake before 30 June.

Accurate valuation and documentation are essential to mitigate audit risk and optimise tax outcomes.

Strategic considerations for superannuation, CGT and corporate compliance

From 1 July 2025, the superannuation guarantee rate increases to 12 per cent. Automotive employers must:

• Ensure all super contributions are paid by 30 June to claim deductions
• Review contractor arrangements, particularly for service technicians and mobile mechanics, to ensure correct classification for PAYG and SGC purposes.

Misclassification risks are increasing, and the ATO is actively reviewing employer compliance in this area.

Download the bulletin for further information or contact our automotive team for tailored advice.