To work out the luxury car tax (LCT) amount you must pay if you import a car, use the following formula:
(LCT value − LCT threshold) × 10 ÷ 11 × 33%.
Like other business taxes, you report and pay LCT on your activity statement.
The LCT value of an imported car includes:
- the customs value (as worked out under the Customs Act 1901) of the car and any parts, accessories or attachments imported at the same time as the car and can reasonably be expected to be fitted to the car (add-ons)
- amounts not already included in the customs value for the international transport of the car and add-ons to Australia
- the amount not already included in the customs value for the insurance of the car and add-ons to be transported to Australia
- any customs duty payable on the importation of the car and add-ons
- any GST payable on the importation of the car and add-ons
- if the importation of the car is GST-free, an amount equal to the amount of GST that would otherwise have been payable.
Work out your LCT rate and threshold.
You’ll need to pay the amount of LCT due on the car, along with any customs duty payable, to the Department of Home AffairsExternal Link as part of the customs clearance process.
Example
Jimmy imports a 1977 Ford Mustang in the 2023–24 income year. The customs value of the car is $90,000 before GST. It costs him an additional $2,500 (inclusive of GST) to have the vehicle imported into Australia.
GST is added to the customs value of the car at the time of import.
To work out the amount of LCT:
Step 1: work out the LCT value:
- Customs value of the car is $90,000
- Add GST applied at import is $9,000 (10% of $90,000)
- Add import costs (GST inclusive) of $2,500
- $101,500 (LCT value).
Step 2: calculate the LCT (LCT value − LCT threshold) × 10 ÷ 11 × 33%:
- ($101,500 − $76,950) × 10 ÷ 11 × 33%
- $24,550× 10 ÷ 11 × 33%
- $7,365 (LCT amount payable to Department of Home AffairsExternal Link).