Credits for luxury car tax (LCT) can only be claimed if you're not registered for goods and services tax (GST). A refund may be available if you're a primary producer or tourism operator who buys luxury vehicles.
Credits
If you're not registered for GST, you can't make an LCT adjustment on a business activity statement (BAS).
You may be entitled to a credit for LCT paid if:
- you overpaid LCT on a sale to you – that is, the supplier paid an amount of LCT that was not legally payable and you've paid the overpaid LCT
- you’ve paid LCT on a sale, or paid LCT on an importation, where you could have quoted but were unable to quote because you were unregistered at the time of supply or importation
- you’ve exported a luxury car (on which LCT has been paid) that is a GST-free export.
You're entitled to a credit only if no-one else has made a valid claim for a credit in relation to the credit entitlement.
You must claim a credit within four years of becoming entitled to the credit.
Claiming a credit for LCT
To claim a credit for overpayment of LCT on a:
- sale – you must use the approved Application for luxury car tax credit – entities not registered for GST form, and lodge it within 4 years of becoming entitled to the credit
- GST-free export – you must make a claim to the Australian supplier.
Refunds
Primary producers and tourism operators can claim a refund of the LCT they have paid on eligible vehicles they have purchased or leased in a financial year.
An eligible vehicle is a four-wheel drive, or all-wheel drive, and is either:
- a 'passenger car' with a ground clearance of at least 175mm
- an 'off-road passenger' vehicle.
You must be a GST-registered primary producer or tourism operator to be eligible for an LCT refund.
For more information on improper refunds that attract our attention, refer to TA 2021/4 – Structured arrangements that facilitate the avoidance of luxury car tax.
Primary producers
For LCT purposes, a primary producer is an individual, partnership, trust or company carrying on a primary production business, including:
From 1 January 2020, primary producers undertaking these activities can claim a refund of LCT they have paid on one eligible vehicle per financial year, up to a maximum of $10,000. The refund applies to vehicles delivered on or after 1 July 2019.
If an eligible vehicle was delivered to a primary producer on or before 30 June 2019, they can only claim a refund of 8/33 of the LCT they have paid, up to a maximum of $3,000.
For more information on primary production, refer to TR 97/11 - Income tax: am I carrying on a business of primary production?
Tourism operators
For LCT purposes, you are a tourism operator if both the following apply:
- you use the car solely for the purpose of carrying on a business
- the principal purpose of your business is carrying tourists for tourism activities.
Tourism activities must be both leisure activities and of a touring nature.
A leisure activity includes activities involving a visit by a tourist to a site that has one of the following:
- scenic beauty
- cultural interest
- environmental interest
- historical interest
- recreational interest.
Carrying tourists for tourism activities does not include transporting passengers by either:
- taxi or limousine for fares
- a hire-car service.
From 1 January 2020 tourism operators can claim a refund of LCT they have paid for each eligible vehicle, up to a maximum of $10,000, delivered to them on or after 1 July 2019.
If an eligible vehicle was delivered to a tourism operator on or before 30 June 2019, they can only claim a refund of 8/33 of the LCT they have paid, up to a maximum of $3,000.
Claiming the refund
You can claim a refund using the Application for luxury car tax refund – for primary producers and tourism operators form.
This refund must be claimed within 4 years of becoming entitled to it.
If you've lodged a claim for an eligible vehicle delivered on or after 1 July 2019, you won't need to make another claim to receive the increased refund amount.
From 1 January 2020 when the law comes into effect, we'll adjust your refund based on the amount you have already received.
You can't claim these refunds on your BAS or from the Department of Home Affairs.
Credits for luxury car tax can only be claimed if you're not registered for GST. A refund may be available for primary producers or tourism operators who buy luxury cars.