Blog

Money Doesn’t Come Without Guidance ...

WHAT IS LUXURY CAR TAX (LCT)? WHO NEEDS AND/OR NEEDS NOT TO PAY LCT?

Awesome Image
24
May

Luxury Car Tax (LCT) is a tax on luxury cars that is payable by businesses that sell or import luxury cars – businesses include retailers, wholesalers, manufacturers and other businesses that sell luxury cars. Individuals (private buyer) also have to pay LCT if they import luxury cars.  So, do you pay LCT of the total price? Thankfully, no. LCT is charged on the portion of the car’s price that exceeds the luxury car threshold, and the rate is 33%. LCT is applicable to most new cars with a GST-inclusive value above the LCT threshold. The LCT threshold is subject to change each financial year.   

Who needs to pay LCT?

  •  A car is less than two years old, as measured from the build date for locally built cars, or the compliance date for imported cars; 
  • For LCT purposes, a car is designed to carry a load of less than two tons and fewer than nine passengers;
  • LCT also applies to a car purchased by a person with disability even if the car is GST-free.

Who needs not to pay LCT?

  •  If the car is for a business purpose and qualifies to be purchased under a company ABN; 
  • If the car was manufactured in Australia more than two years before the sale; 
  • If the car was exported as a GST-free export; 
  • A fuel-efficient car (combined-cycle fuel consumption of 7 litres per 100km or less) under the fuel-efficient car limit; 
  • A car that is registered for use as an emergency vehicle such as an ambulance, fire-fighting vehicle, police vehicle etc.; 
  • A car with modifications for people with a disability.

Comments 0

    Currently, there are no comment.

Login to comment

Latest Posts

Popular Post

We provide the fastest, easiest and most effective online tax return solution

trustedsite