Luxury Car Tax (LCT) is a tax of 33% on any luxury car sold in Australia or imported into Australia greater than the LCT threshold. A car is considered to be a motor vehicle designed to carry less than 2 tonnes and 9 passengers, however, Limosuines are included no matter how many passengers they carry.
The threshold for the 2014/15 year is $75,375 for a fuel efficient vehicle and $61,884 for any other vehicle. These rates are $75,375 and $63,184 respectively in the 2015/16 financial year.
If you are required to be registered, or registered for GST and you import or sell a luxury car you must be registered for LCT. If you are a private buyer and import a luxury car you will also be required to register.
LCT is paid through the Business Activity Statement (BAS) and once registered Labels 1E and 1F will appear on the BAS. You can produce instant BAS reports through MYOB Essentials, it’s easy online accounting.
The value of a Luxury car will generally include the accessories and modifications.
How to work out the LCT on a sale?
The formula is (LCT value – LCT threshold) x 10/11 x 33%
The LCT value is the retail price of the car minus LCT included in the sale. The retail price includes GST, customs, dealer delivery, warranties, fleet rebates and incentive payments. The LCT value doesnt include stamp duty, transfer fees or registration.
How to work out the LCT on an import?
The formula is (LCT value – LCT threshold) x10/11 x 33%
The LCT value of an importation includes the customs value of the car, any parts or accessories or attchments imported at the same time, customs duty, GST and insurance for the transport.
If you have sold a Luxury car which is less than 2 years old and has previously paid LCT, the LCT can be reduced by the amount already paid.
MYOB Essentials is the fast and easy way to manage your cash flow, particularly on purchases such as luxury cars, and easily manages your ATO compliance requirements such as BAS and GST reports.
The information provided here is of a general nature for Australia and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstance will vary for end of financial year.