What you need to know about luxury car tax
Luxury car tax or LCT is a 33% tax on cars that have a value (including GST) above the set threshold. However, the tax is only on the value which is above the threshold.
Businesses and individuals that sell or import luxury cars are required to pay LCT.
You can make LCT payments in instalments or annually. If you choose to report your payments in instalments, they will be included in your GST instalments. If you choose to pay GST annually, then you don’t need to worry about reporting monthly or your quarterly BAS.
You may be able to defer paying LCT by quoting your ABN. You are able to do this if you are only going to be using your car to:
- Hold it for trading stock (doesn’t include holding it for hire or lease)
- Carry out research and development for the car’s manufacturer
- Export it GST-free
If and once you stop using your car for the above purposes, then you will need to start paying LCT.