A brief summary of how luxury car tax (LCT) works and who has to pay it.
Luxury car tax (LCT) is a tax on cars that have a GST-inclusive value above the LCT threshold.
LCT is:
- imposed at the rate of 33% on the amount above the luxury car threshold
- paid by businesses that sell or import luxury cars (dealers), and by individuals who import luxury cars.
You need to be registered for LCT if you either:
- operate a business that sells luxury cars
- are an endorsed public institution that purchases a luxury car locally that is both
- a work of art or collector piece
- for the sole purpose of public display.
We are reviewing arrangements involving sales designed to improperly obtain refunds of LCT and evade LCT on the retail sale of the cars – see TA 2021/4 – Structured arrangements that facilitate the avoidance of luxury car tax.
A brief summary of how luxury car tax (LCT) works and who has to pay it.