GST issues registers

Motor vehicle industry partnership

Issue 17 - Motor vehicles for the diplomatic community

17.a. Can embassies, consulates, international organisations, diplomatic and consular staff purchase vehicles GST and LCT free?

Non-interpretative - other references (see TR 92/14 - Income tax: taxation privileges and immunities of prescribed International Organisations and their staff).

No. Diplomatic missions, consular posts, international organisations and privileged individuals from these bodies are required to pay GST on all taxable goods and services purchased in Australia. These bodies and individuals are also required to pay LCT on all luxury cars purchased in Australia. This applies to locally manufactured vehicles and imported vehicles.

17.b. Can these organisations and individuals receive a refund of GST and LCT which they pay?

Non-interpretative - other references (see TR 92/14 - Income tax: taxation privileges and immunities of prescribed International Organisations and their staff).

Yes. Generally speaking, refunds can be claimed under the Indirect Tax Concession Scheme (ITCS) administered by the ATO.

17.c. Are all entitlements the same?

Non-interpretative - straight application of the law.

No. The various Diplomatic Privileges and Immunities Acts administered by the Department of Foreign Affairs and Trade (DFAT) detail the entitlements of the various countries and organisations. Each country's entitlement is based on a broadly reciprocal arrangement with the concessions offered to Australian diplomats in the home country. All missions, posts and organisations have been advised of their individual entitlements by DFAT.

17.d. Are there different entitlements for locally manufactured and imported vehicles?

Non-interpretative - straight application of the law.

Yes. All organisations and individuals are entitled to a refund of GST and any LCT on locally manufactured vehicles. However, entitlements to refunds of GST and LCT under the ITCS in relation to imported vehicles vary widely from country to country.

17.e. What about imported vehicles?

Non-interpretative - straight application of the law.

While entitlements in relation to the purchase of imported vehicles in Australia vary from country to country, all individuals and organisations are able to directly import a vehicle duty free, although individuals classified as Administrative and Technical staff or Consular employees can only directly import within the first 6 months of their posting. In any case, with a direct import the individual or organisation needs to have title in the vehicle before it is entered for home consumption in Australia. The direct importation can happen in two ways:

3.

The diplomat can import a vehicle they owned along with their other personal effects, or

4.

The mission, post or individual can engage an Australian car dealer to facilitate the purchase of the vehicle while the vehicle is still outside Australia. Provided the supply is not connected with Australia it will not be a taxable supply. The vehicle is shipped to Australia, imported and entered for home consumption in the name of the diplomat through the completion of a Customs Nature 10 entry form. The importation is a taxable importation, but the Vienna Convention allows a diplomat to import personal effects free of taxes and duties. Accordingly no duty is payable nor is GST and any LCT payable in the case of a directly imported vehicle.

17.f. What is the situation concerning imported vehicles which are purchased in Australia from bond?

Non-interpretative - straight application of the law.

In this case GST and, if applicable, LCT must be charged. Whether or not the individual or organisation is entitled to a refund under the ITCS will depend on the entitlement of the particular country.

17.g. Where can I obtain further information?

Either from the Protocol Branch of the Department of Foreign Affairs and Trade or from the ITCS Processing team, by email at itcs@ato.gov.au.

For more information refer to the Indirect Tax Concession Scheme.

© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).