Luxury Car Tax (LCT)
Luxury car tax is a tax that is payable on vehicles that are above a certain price.
LCT becomes applicable when a standard vehicle is above $57,466, OR if you are buying a fuel efficient vehicle the threshold is at $75,375. An example of a fuel efficient car would be Toyota Prius.
Currently the luxury car tax stands at 33%, which is already included in the total purchase price of your vehicle.
The reason that you should be aware of these thresholds and the current LCT rate is because as a business or a sole trader you cannot make business claims on you vehicle’s costs that are above these thresholds.
What this means for you is that even though if you purchased a vehicle costing $74,000 and you are registered for GST, you will be only be able to claim back immediately $5746 on your next Business Activity Statement (BAS); and with regard to depreciation of the vehicle you will depreciate it at a lower cost.
It is for this reason that you should come and see us at MAS Tax Accountants and discuss this, and other matters in further detail. From such discussions, we can clearly demonstrate to you how this type of scenario can impact you and your business, as well as suggesting viable alternatives for you.
For more information or to schedule an appointment, please contact us below or call us on 1300 627 829
