ATO Announces Amendments To Luxury Car Tax

by Mary Swire, Tax-News.com, Hong Kong

09 December 2008

The Australian Taxation Office has announced several important amendments to the government's luxury car tax scheme.

Earlier this year, the ATO announced that as of July 1, LCT would increase from 25 to 33%, and would apply to certain vehicles over the LCT threshold of AUD57,180 (USD36,940) for the 2008-09 year.

However, it has been revealed that amendments to the LCT legislation that increased the rate have also made a number of concessions available. These include:

• In certain circumstances primary producers and tourism operators can claim refunds of the additional LCT on certain luxury cars (up to a maximum of AUD3,000 per car).
• If a contract to purchase or import a luxury car was made before 7.30pm Australian Eastern Standard Time (AEST) on May 13, 2008, the LCT payable will remain at 25% regardless of when the vehicle is delivered.
• Luxury car tax does not apply to fuel efficient cars under the fuel efficient car limit (AUD75,000 for the 2008-09 year), from October 3, 2008. From July 1, 2008 to October 2, 2008, these vehicles were subject to 33% LCT. LCT at the rate of 33% will still apply to vehicles which are above this threshold, also from July 1, 2008.

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