A New Tax System (Luxury Car Tax) Act 1999

New car dealers and importers: Registered dealers are the primary payers of LCT in the supply chain. They quote their ABN when acquiring stock from wholesalers or importing directly, then become liable for LCT on their retail supply. The quoting system channels liability to the dealer making the end supply.

Parallel importers and independent importers: Any entity that enters a luxury car for home consumption is liable for LCT on importation, regardless of whether it carries on an enterprise or is registered. This is a significant distinction from the supply rules.

End consumers: End consumers who are not registered entities bear the LCT economically through the price of the car. They may claim credits under Division 17 if they overpaid or if they could have quoted but were not registered at the time.

Primary producers and tourism operators: Entitled to refunds of up to $10,000 per financial year under Division 18 for LCT borne on specified four-wheel-drive or all-wheel-drive cars used in their businesses (sections 18-5 and 18-10).

Disabled people: Modifications made solely to adapt a car for driving by a disabled person or for transporting a disabled person are excluded from the luxury car tax value (section 5-20(5)).

GST groups and joint ventures: The representative member of a GST group is liable for LCT attributable to any member (Division 16). The joint venture operator of a GST joint venture is liable for LCT from activities conducted on behalf of joint venture participants.

Suppliers: Must pay LCT on taxable supplies of luxury cars unless the recipient quotes (section 5-5). Must not accept an improper quote where there are reasonable grounds to believe it is not genuine (section 9-25). Must comply with attribution rules when completing GST/LCT returns (section 13-15).

Importers: Must pay assessed LCT on taxable importations at the same time and place as customs duty, or as the regulations provide (section 13-20). Customs officers may refuse to deliver goods until assessed LCT is paid.

Quoters: Must not quote in circumstances where they are not entitled to (section 9-30, 20 penalty units). Must notify the supplier if they are not entitled to quote for a particular supply during a periodic quoting arrangement (section 9-10(3), 20 penalty units). The Criminal Code applies to these offences (section 21-15).

Adjustment obligations: Suppliers, recipients, and importers must make increasing or decreasing luxury car tax adjustments in the tax period in which a luxury car tax adjustment event occurs (Division 15). Adjustments must be made within four years of the original supply or importation (section 13-10(2)).

Credit and refund claims: Credits and refunds must be claimed within four years of entitlement arising (sections 17-10(1) and 18-15(1)).

Commissioner of Taxation: The Act is administered by the Commissioner. The Commissioner may enter into agreements with entities about how to calculate luxury car tax values for particular supplies or importations, and those agreements prevail over the Act to the extent of any inconsistency (section 21-10). The Commissioner may make written determinations about how to calculate transport and insurance costs in the context of importations (section 7-15(2)).

Periodic quoting: Suppliers may accept periodic quotes from buyers for all supplies in a period of up to 12 months (section 9-10). This administrative arrangement avoids the need for individual quotes on every supply.

Regulations: The Governor-General may make regulations prescribing matters required or permitted by the Act (section 21-20). Regulations define emergency vehicles, refund-eligible cars, tourist activities, and other matters on which the operative provisions depend.

Finance Minister: May give written directions for the purpose of giving effect to the Commonwealth's notional LCT liability, including directions about money transfers within Commonwealth accounts (section 21-1(2) and (3)).

Customs exemptions: Certain Schedule 4 items of the Customs Tariff (items 10, 11, 15, 18, 21, 24) exempt importations from LCT liability under section 7-10(3)(c). The Commissioner may not override these statutory exemptions.

Quoting offences: Section 9-30 makes it an offence (20 penalty units) to quote an ABN in circumstances where you are not entitled to, in contravention of the approved-form requirement of section 9-15(1), or to otherwise falsely quote an ABN. Section 9-10(4) makes it an offence (20 penalty units) to fail to notify a supplier that you are not entitled to quote for a particular supply during a periodic quoting arrangement.

Anti-avoidance: Division 165 of the GST Act applies to LCT amounts payable under Subdivision 13-B (importation payment) as if they were GST amounts (section 13-30). This brings the GST anti-avoidance regime across to LCT importations.

Repayment of excess credits: If a credit claimed under Division 17 exceeds the entitlement, the excess is treated as LCT becoming payable at the time the credit was paid or applied, attracting collection and recovery provisions of the Taxation Administration Act 1953, including the general interest charge (section 17-15).

Customs refusal: Customs officers may refuse to deliver imported luxury cars until assessed LCT is paid (section 13-20(2)).

Cancellation of exemptions: Section 21-5 cancels the effect of any provision of another Act that would exempt a person from LCT liability, unless the other Act commenced after this section and specifically refers to LCT under this Act. This prevents general exemption provisions in other legislation from inadvertently sheltering luxury car purchases.

Supplies: LCT on taxable supplies is attributable to the same tax period as the underlying GST supply (section 13-15(1)), except for supplies by lease or hire, which are wholly attributed to the first tax period (section 13-15(1A)). The LCT amount increases the entity's net amount for that tax period and is reported and paid through the GST reporting system.

Importations: Assessed LCT on importations is paid at the time and place customs duty is payable, or as the regulations specify (section 13-20). A Customs officer may withhold delivery of the car until payment is made.

Adjustments: Luxury car tax adjustment events (section 15-5) include cancellation of a supply, changes in consideration, and supplies becoming or ceasing to be taxable supplies of a luxury car. Returns of a car for repair or maintenance are excluded. Adjustments must be made within four years of the supply or importation (section 13-10(2)).

Change of use adjustments: Division 15 Subdivision 15-B applies when a car is supplied or imported under a quote but is later used for a non-quotable purpose. An increasing adjustment equal to the LCT that would have been payable is triggered (section 15-30(3) and 15-35(3)). A decreasing adjustment arises conversely when a car was supplied without a quote but only used for quotable purposes (sections 15-30(1) and 15-35(1)).

Bad debt adjustments: Suppliers who have provided LCT on a sale where payment is not received may take decreasing adjustments when a debt is written off as bad or is overdue for 12 months (section 15-40). Cash-basis taxpayers are excluded. Recovering a written-off amount triggers an increasing adjustment (section 15-45).

Credits under Division 17: Available to unregistered entities who bear LCT on an overpaid supply, who could have quoted but were not registered, or who paid LCT on an importation for which they could have quoted but were not registered. Claims must be in the approved form and made within four years.

Refunds under Division 18: Primary producers and tourism operators claim refunds up to $10,000 per financial year for eligible cars. Claims must be in the approved form and made within four years.

GST Act: The Act is deeply integrated with the A New Tax System (Goods and Services Tax) Act 1999. Most definitions (supply, enterprise, registration, connected with the indirect tax zone, net amount, consideration, and many others) are imported from the GST Act (section 27-1). Attribution rules for LCT cross-reference GST attribution rules (sections 13-15 and 13-10). LCT amounts are incorporated into GST net amounts (section 13-5). Division 165 of the GST Act anti-avoidance provisions apply to LCT on importations (section 13-30).

Imposition Acts: LCT is imposed by three separate Acts: the A New Tax System (Luxury Car Tax Imposition-General) Act 1999, the A New Tax System (Luxury Car Tax Imposition-Customs) Act 1999, and the A New Tax System (Luxury Car Tax Imposition-Excise) Act 1999. The rate applicable under whichever of those Acts covers the supply or importation determines the multiplier in the LCT formula in sections 5-15 and 7-15.

Taxation Administration Act 1953: Parts 3-10, 4-1 and 4-15 in Schedule 1 to the TAA 1953 contain administration, collection, and recovery provisions. The general interest charge under section 105-80 of that Schedule applies to excess credits treated as LCT payable under section 17-15. Assessment of LCT on importations is covered by Division 155 of Schedule 1 to the TAA 1953.

Customs Act 1901: The customs value, entry for home consumption, and the regime for securities and undertakings under sections 162 and 162A of the Customs Act all interact with the LCT importation rules. Security arrangements under those sections can defer LCT payment where goods are later re-exported (section 13-25).

Customs Tariff Act 1995: Schedule 4 items of the Customs Tariff Act 1995 exempt certain importations from LCT (section 7-10(3)).

Income Tax Assessment Act 1997: The definition of primary production business (section 995-1 of the ITAA 1997), approved form (section 995-1), and the indexation methodology for the luxury car tax threshold and fuel-efficient car limit (Subdivision 960-M) all come from the ITAA 1997.

Road Vehicle Standards Act 2018: The fuel consumption rating used to identify fuel-efficient cars is measured under national road vehicle standards in force under section 12 of the Road Vehicle Standards Act 2018 (section 25-1(4)).

A New Tax System (Australian Business Number) Act 1999: The ABN used in quoting is defined by section 41 of the ABN Act (section 27-1). Section 23 of that Act provides penalties for misuse of ABNs (Note 3 to section 9-30).

Limousines are always cars regardless of passenger capacity: The definition of 'car' in section 27-1 includes a limousine regardless of the number of passengers it is designed to carry. The Full Federal Court in Dreamtech International Pty Ltd v Commissioner of Taxation [2010] FCAFC 103 confirmed that whether a vehicle is a limousine is a factual question to be decided on ordinary meaning. A stretched Hummer H2 carrying 14 passengers was held to be a limousine and therefore subject to LCT, even though it exceeded the normal passenger limit.

Quoting is purpose-specific and must exist at the time of the quote: Section 9-5 requires that at the time of quoting you must have the intention to use the car only for the quotable purpose. A quote made in the expectation of on-selling but without current entitlement is an improper quote. Section 9-25 means the quote will be ineffective (and the supplier liable for LCT) if the supplier has reasonable grounds for believing the quote is improper.

Pre-delivery accessories and options inflate the LCT value: Section 5-20(3) includes in the luxury car tax value the price of all supplies made to the buyer in relation to the car before the end supply, or made under an arrangement with the supplier at or before the time of the end supply. Dealer-added accessories or modifications that bring a car's price above the threshold can result in LCT liability even where the base car price was below the threshold.

Lease and hire supplies: LCT falls at the first period, not spread: Section 13-15(1A) means that for cars supplied by lease or hire, the entire LCT liability is attributed to the first tax period, not spread over the lease term. This creates a front-loaded tax liability for lessors of luxury cars.

Two-year-old exemption date is entry for home consumption, not manufacture: Section 5-10(3)(b) provides that an imported car is more than two years old if it was entered for home consumption more than two years before the supply. The manufacture date governs only for cars not imported. Dealers holding re-imported stock should verify the entry date, not the manufacture date.

Adjustment time limit is four years: Section 13-10(2) requires adjustments to be made within four years of the supply or importation. Dealers who discover an LCT error after four years cannot make a retrospective adjustment, potentially crystallising an overpayment or underpayment permanently.

Commonwealth exemptions are cancelled unless specifically enacted: Section 21-5 cancels any provision of any other Act that would exempt a person from LCT, unless the exempting provision was enacted after 1 July 2000 and specifically refers to LCT under this Act. Public sector entities relying on general legislative exemptions should verify their LCT position.

New car dealer selling above threshold: A registered dealer sells a new luxury sedan with a luxury car tax value of $95,000. The 2024-25 threshold is $80,567. The taxable amount is $95,000 minus $80,567 = $14,433. LCT is calculated as: Rate x (10/11) x $14,433. The dealer includes this in its net amount for the GST tax period in which the supply is attributed.

Dealer quoting for trading stock: A dealer imports a luxury car with a luxury car tax value of $110,000 and quotes its ABN to the shipping agent. No LCT is payable on the importation. The dealer holds the car as trading stock. When it sells the car to a retail buyer who does not quote, LCT becomes payable on that sale based on the retail luxury car tax value.

Primary producer refund: A farmer registered for GST purchases a four-wheel-drive vehicle eligible under the regulations as a refund-eligible car. The dealer charges $8,500 LCT, which is embedded in the price. The farmer is not registered for LCT purposes and cannot quote. The farmer claims a refund of $8,500 from the ATO within four years under section 18-5. The maximum refund is $10,000, so the farmer receives the full $8,500.

Change of use increasing adjustment: A dealer quotes its ABN on the acquisition of a luxury car intending to hold it as trading stock. The dealer subsequently decides to use the car as a company vehicle for internal use rather than selling it. On commencing non-quotable use, the dealer has an increasing luxury car tax adjustment under section 15-30(3) equal to the LCT that would have been payable on the original supply.

Tourism operator limousine service: A tourism company imports a stretch limousine for use in carrying tourists. The company is a registered tourism operator. The luxury car tax value of the limousine is $180,000. LCT is payable on importation. The tourism operator then claims a refund of up to $10,000 under section 18-10.