Definitions

Car tax disc

Luxury Car Tax

Luxury Car Tax is a tax 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 AUD$57,180. (as 01/07/2008)

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:

  • 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.

Notes

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