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Private Fleet on luxury car tax

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Private Fleet on luxury car tax:

Luxury car tax or LCT is payable to the Australian Tax Office (ATO) for all cars purchased in which the price exceeds the luxury car tax threshold ($57,009) except for certain instances described below.

The luxury car tax is payable on every dollar exceeding this threshold.

Luxury car tax is calculated as 25% of the GST exclusive portion of the purchase price over $57,009. Luxury car tax can be calculated using the following steps:

  • Calculate the amount subject to LCT. Take the full price of the vehicle and subtract $57,009.
  • Find the GST exclusive portion of the above figure. The easy way to do this is to multiply the figure by 10 and then divide by 11.
  • Thirdly multiple the above figure by 25% to calculate the LCT component on the vehicle price.

The luxury car tax should then of course be added onto the GST inclusive price of the car.

Example:

  • Take a vehicle whose GST inclusive price is $200,000. $200,000 less $57,009 equals $142,991, that is the figure subject to luxury car tax
  • Taking off the GST portion of this figure gives $129,992
  • Lastly multiplying by 25% gives a hefty $32,498 in Luxury Car Tax
  • Supply price for this car including LCT is $232,498

Luxury car tax exceptions:

  • If the vehicle was purchased or imported prior to 1st July 2000
  • If the car is supplied over two years after the local build date or, if imported, the vehicle compliance date.
  • If it is an emergency vehicle (eg an ambulance)
  • If it is not GST free and is specially fitted out for transporting disabled people seated in wheelchairs
  • If it is a campervan or motor home
  • If it is a commercial vehicle that is not designed for the principal purpose of carrying passengers.
  • If the vehicle is supplied by private sale

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