Luxury Car Tax
Encyclopedia
Luxury Car Tax is a tax within the Australian taxation system
, collected by the Australian Taxation Office
on behalf of the Australian Government.
Luxury Car Tax (LCT) is payable by businesses which purchase or import luxury cars, unless the business' ABN number is quoted in the correct format to the supplier or Customs.
LCT is charged in addition to the Goods & Services Tax (GST), but it is not payable on the full price of the vehicle. LCT is only payable on 33% (up from 25% as of 1/7/08, though interestingly, no senate approval for this increase had been obtained) of the value of the GST-exclusive value which exceeds the LCT threshold. The LCT threshold is currently A$57,466 (for the 2010-11 financial year). An increased threshold of A$75,375 applies to fuel efficient cars that have a combined fuel consumption rating not exceeding 7 litres per 100 kilometres (based on a combined test cycle rating under ADR
81).
LCT is reported on an organisation's Business Activity Statement
at labels 1E and 1F. An organisation is not required to complete the LCT section of their BAS when they have elected the GST Instalment Option as LCT is included in this amount. Organisations which report and pay GST annually are only required to report LCT on their annual GST return (GSTR)
Businesses are only permitted to quote their ABN when the vehicle is used for the following purposes:
LCT Statistics
Luxury Car Tax statistics can be found in the Taxation Office's publication Taxation Statistics.
Taxation in Australia
There are many forms of taxation in Australia. Individuals and companies in Australia may be required to pay taxes or charges to all levels of government: local, state, and federal governments...
, collected by the Australian Taxation Office
Australian Taxation Office
The Australian Taxation Office is an Australian Government statutory agency and the principal revenue collection body for the Australian Government. The ATO has responsibility for administering the Australian federal taxation system and superannuation legislation...
on behalf of the Australian Government.
Luxury Car Tax (LCT) is payable by businesses which purchase or import luxury cars, unless the business' ABN number is quoted in the correct format to the supplier or Customs.
LCT is charged in addition to the Goods & Services Tax (GST), but it is not payable on the full price of the vehicle. LCT is only payable on 33% (up from 25% as of 1/7/08, though interestingly, no senate approval for this increase had been obtained) of the value of the GST-exclusive value which exceeds the LCT threshold. The LCT threshold is currently A$57,466 (for the 2010-11 financial year). An increased threshold of A$75,375 applies to fuel efficient cars that have a combined fuel consumption rating not exceeding 7 litres per 100 kilometres (based on a combined test cycle rating under ADR
Australian Design Rules
The Australian Design Rules are national Australian standards for vehicle safety, anti-theft system and emission standards. They have been acclaimed as less arbitrary than those of other countries, and successfully prevented the importation of many dangerous Japanese imports over the years...
81).
LCT is reported on an organisation's Business Activity Statement
Business Activity Statement
The Business Activity Statement is a form submitted to the Australian Taxation Office by all businesses to report their taxation obligations....
at labels 1E and 1F. An organisation is not required to complete the LCT section of their BAS when they have elected the GST Instalment Option as LCT is included in this amount. Organisations which report and pay GST annually are only required to report LCT on their annual GST return (GSTR)
Businesses are only permitted to quote their ABN when the vehicle is used for the following purposes:
- Exporting the vehicle in circumstances where the export is GST-free
- Conducting research or development for the vehicle's manufacturer
- Holding the vehicle as trading stock (not including for rent or leasing purposes)
The LCT becomes due and payable when you on-sell the luxury car or stop using it for a quotable purpose. This might happen if you hold a car as trading stock and start using it for private purposes or if it becomes a capital asset of your business.
LCT Statistics
Luxury Car Tax statistics can be found in the Taxation Office's publication Taxation Statistics.