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  • Footnotes

    1. Juan Toro, J, Ogata, K, Hutton, E, Caner, S, 2013, Assessment of HMRC's tax gap analysis, International Monetary Fund, Fiscal Affairs Department, October 2013, page 42.

    2. Australian Bureau of Statistics, Statistical language – Types of errorExternal Link

    3. In 2013–14, the LCT threshold was $75,375 for fuel-efficient vehicles and $60,316 for all other eligible vehicles. A fuel-efficient car has a fuel consumption not exceeding seven litres per 100 kilometres, as a combined rating under the vehicle standards in force under section 7 of the Motor Vehicle Standards Act 1989.

    4. We use 1.43 and 33% to estimate the LCT and GST payable when a luxury car has an ‘all-up price’.

    The 1.43 represents the adjustment factor required to remove the GST (10%) and LCT payable (33%) components of the all-up price in order to determine LCT payable.

    For example Darren buys a new motor vehicle from ABC Motors with an 'all-up price' of $96,305. The LCT threshold applicable for 2013–14 was $60,316. ABC motors removes the GST and LCT payable (43% in all) from the amount over the LCT threshold. The calculation is:

    All-up price – LCT threshold = ($96,305 – $60,316) / 1.43 = $25,167.

    ABC Motors then multiplies this amount by the LCT rate of 33% to get the LCT payable, as follows: ($25,167 x 33 ÷ 100) = $8,305.

      Last modified: 05 Nov 2015QC 47278