Luxury Car Tax
The Luxury Car Tax (LCT) is a tax within the
Description
LCT is payable by businesses which sell or import luxury cars, unless the business's Australian Business Number (ABN) number is quoted in the correct format to the supplier or Customs.
LCT is charged in addition to the
LCT is reported on an organisation's
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.[3]
LCT statistics
Luxury Car Tax statistics can be found in the Taxation Office's publication Taxation Statistics.
Criticism
There has been calls from the industry peak bodies such as the Federal Chamber of Automotive Industries (FCAI), the Australian Automotive Association (AAA) and the Australian Automotive Dealer Association (AADA) to abolish the tax.[4] They claim the tax was designed to protect local automobile manufacturing industry which no longer exist as the big three manufacturers Toyota, Ford and Holden ceased operations in the 2010s.[4]
There has been a suggestion to increase the LCT threshold or give farmers exemption.[4]
References
- ^ A New Tax System (Luxury Car Tax) Act 1999 (Cth) www.legislation.gov.au
- ^ Luxury car tax rates and thresholds Australian Taxation Office
- ^ "Luxury car tax – how to complete your activity statement". Australian Taxation Office. 2007. Archived from the original on 27 September 2007. Retrieved 7 July 2007.
- ^ a b c "Luxury Car Tax: Industry, MPs renew calls to scrap "bad tax" | CarAdvice". CarAdvice.com. Retrieved 23 February 2020.