Motor vehicle incentive payments

Third party MVIPs

A motor vehicle incentive payment (MVIP) is the consideration provided by a motor vehicle manufacturer, distributor or importer (collectively referred to as motor vehicle manufacturers in this guide) to the motor vehicle dealer when they meet certain conditions.

Some MVIPs are payment provided by a motor vehicle manufacturer to the motor vehicle dealer for the sale of a motor vehicle by the dealer to the dealer's customer. These MVIPs are third party payments in connection with a sale of a particular motor vehicle and are an additional amount for a particular purchase by a customer (third party MVIPs).

The information provided here relates to third party MVIPs that result from floor plan arrangements (bailment), which motor vehicle dealers use to finance their trading stock.

GST and LCT for third party MVIPs

Third party MVIPs can give rise to GST and luxury car tax (LCT) consequences for:

  • manufacturers, including how to calculate any adjustment for making third party MVIPs
  • dealers, including how to report GST and LCT in activity statements and what to include in sale documents
  • customers, including how the value of the vehicle is calculated for LCT purposes and the amount of GST credit that may be claimed, if entitled.

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    Last modified: 06 Jun 2016QC 49280