How to use a passenger car correctly according to tax principles

Abstract

Making decision about procuring cars for use in the business is something that entrepreneurs should have well plan as cars are one of the assets that almost every business needs to use in their operations. Some have them for sale and some have them for operation such as car for executive positions, for fright or for staff shutter bus etc. In terms of taxation, different car types may have different tax burdens both corporate income tax and value added tax. Therefore, the entrepreneurs should study the effects of each tax and practice correctly to avoid problems that may occur from offense under the tax law. As the result, it can cause the increase of unnecessary expenses to entrepreneurs in the form of fines, penalties or criminal fines which are prohibited expenses in the calculation of the net tax profit. This paper intends to study and collect information from academic papers, relevant laws and discusses tax ruling of the Revenue Department which related to a passenger car or car with seat up to 10 seats for entrepreneurs or those interested in order to apply for their business’s planning. This paper outlines the different practices between accounting and taxation for a passenger car or car with seat up to 10 seats in terms of purchasing, hiring and leasing. Moreover, it summarizes laws under the Excise Tariff Act newly issued for double cab which affects the tax practice on such cars.