Car Tuition Companies

A car tuition company refers to a company which holds a driving school licence and with it, provides car driving instructions for a fee.

A car tuition company refers to a company which holds a driving school licence and with it, provides car driving instructions for a fee.

A car tuition company is able to claim full tax allowance/deduction on the cost/expenses incurred on cars used principally for instructional purposes. These cars are described as "For Instruction (Co)" in the Vehicle Log Card.

The income generated from the business of providing driving instruction for cars is to be quarantined such that losses and capital allowances arising from such activities cannot be deducted against other income. Unutilised losses and unutilised capital allowances can be carried forward to be deducted against income derived from the same business in subsequent years of assessment, subject to Sections 23(4) and 37(12) of the Income Tax Act. Unutilised losses and unutilised capital allowances remaining on the cessation of the car tuition business will be disregarded.

The requirement to quarantine the income from the business of providing car driving instruction will not apply to unutilised losses and unutilised capital allowances relating to YA 1999 and before. Therefore, such unutilised losses and unutilised capital allowances will continue to be available as deduction against other income derived by the car tuition companies.

Car tuition companies which carry on other businesses are required to keep separate records and accounts to enable the income and expenses relating to their business of providing driving instruction for cars to be readily identified and ascertained separately from the income/ expenses of the other businesses.

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