Luxury Car Tax (LCT)

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:

 

 

 

Financial year

Fuel-efficient vehicles

Other vehicles

2016-17

$75,526

$64,132

2015–16

$75,375

$63,184

2014–15

$75,375

$61,884

2013–14

$75,375

$60,316

2012–13

$75,375

$59,133

2011–12

$75,375

$57,466

2010–11

$75,375

$57,466

2009–10

$75,000

$57,180

 

 

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.

LCT

 

LCT Registration:

 

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.

Luxury Car Tax LCT

LCT Exemptions:

 

  • When ABN is quoted by recipient

  • When car is manufactured in Australia or imported to Australia more than two years ago

  • GST free car that is exported

  • Cars used for emergencies like ambulance, police or firefighting vehicles

  • Commercial vehicles to carry goods

  • When car is modified for disabled people

  • When LCT has already been paid

  • When an endorsed public institution buys a work-of-art or collection car to be displayed to the public or sold to another endorsed public institution who uses the car for the same purpose only.

 

Calculating and reporting LCT:

 

To calculate LCT, the following two questions must be answered first:

 

  1. Is the car imported or sold?

  2. Has LCT already been paid or not?

 

LCT is reported on you activity statement and is payable monthly, quarterly, or annually, depending various conditions to be considered.

 

To calculate the amount of your LCT and be assisted for your LCT report, you can contact us.