Luxury Car Tax (LCT) applies to the cars with the GST inclusive value above the threshold (LCT Threshold) set by ATO.
Accordingly, if the value of car which is either sold in Australia or imported to Australia is more than LCT threshold, the LCT must be paid.
LCT thresholds defined by ATO for each financial year are shown in the table below:
In addition to LCT threshold, the car must a motor vehicle, except the motorcycle, that:
Be less than two years old when car is imported or manufactured in Australia
The capacity of carrying less than two tonnes and fewer than nine passengers but includes limousines.
Who Pays LCT and How Much?
LCT applies to entities who import luxury cars and to businesses who sell them.
With the LCT rate of 33%, luxury car dealers and importers must pay 33 cents for every dollar above the threshold value.
Note: The value any spear parts, accessories or attachments are added to the value of the car when these items are sold at the same time with the car and the total amount is subject to LCT.
Same as wine equalization tax (WET), GST registration is a pre-condition for LCT registration.
LCT registration is a must for:
The businesses that import or sell luxury cars and the individual luxury car importers
Endorsed public institutions (EPI) who buy the car that is a work of art or collectors piece and the car is used only to be displayed to the public and visitors. Examples of EPIs are museums, libraries, and galleries who are endorsed to be allowed to deduct the gifts they receive.