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House of Representatives

Tax Laws Amendment (Luxury Car Tax - Minor Amendments) Bill 2008

Explanatory Memorandum

Circulated by the authority of the Treasurer, the Hon Wayne Swan MP

General outline and financial impact

Minor luxury car tax amendments

Schedule 1 to this Bill contains minor and technical amendments to the A New Tax System (Luxury Car Tax) Act 1999 , the Taxation Administration Act 1953 and the Tax Laws Amendment (Luxury Car Tax) Act 2008 to ensure that the amendments contained in the Tax Laws Amendment (Luxury Car Tax) Act 2008 operate as intended.

The amendments clarify that the vehicle financing arrangements do not affect refunds under Division 18 of the A New Tax System (Luxury Car Tax) Act 1999 being claimed by all eligible businesses, or contracts entered into before Budget night facing the 25 per cent luxury car tax rate. The amendments also clarify that the luxury car tax refunds under Division 18 are to be paid directly to the claimant.

Date of effect : In the main the changes take effect from 1 July 2008. However, the amendment for finance arrangements entered into before 7.30 pm on 13 May 2008 will commence from 3 October 2008, which is the date that these provisions commenced.

Financial impact : Nil.

Compliance cost impact : Minimal. Evidence will need to be provided to eligible refund claimants on whether their vehicle has borne, and the amount of, luxury car tax.

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