Luxury car tax (LCT) applies to all supplies and importations of luxury cars where the value (including GST) exceeds the LCT threshold. The value generally also includes the price paid for accessories and modifications made to the car before delivery.
Cars with a value higher than the current LCT threshold are subject to a tax of 33% – this tax only applies to the portion of the car’s value that is above the threshold, not the total value of the car.
If you report and pay GST using a pre-determined GST instalment amount (option 3 on your business activity statement [BAS]), don't complete the LCT section of your BAS. We have included your LCT in this amount. You must still report LCT payable (1E) and LCT refundable (1F) when lodging your Annual GST Return. This is due at the same time as your income tax return.
If you report and pay GST annually (option 4 on your BAS), you don't have to report LCT on monthly or quarterly BASs. You'll need to report LCT on your Annual GST Return.
Who needs to pay LCT and who can defer paying it?
You need to pay luxury car tax (LCT) on all cars above the LCT threshold that you sell or import.
In some circumstances you can quote your ABN when you purchase or import a luxury car so that the LCT is deferred until you on-sell the car or stop using it for a quotable purpose.
You can defer paying LCT if you intend to use the car for no other purpose other than any of the following quotable purposes:
holding it as trading stock, other than holding it for hire or lease
conducting research and development for its manufacturer
exporting it in circumstances where the export is GST-free.
You may stop using a car for a quotable purpose, for example, 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.