Luxury Car Tax Determination

LCTD 2007/1

Luxury car tax: what is the luxury car tax threshold for the 2007-2008 financial year?

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Preamble

This publication provides you with the following level of protection:
This document is a ruling for the purposes of section 105-60 of Schedule 1 to the Taxation Administration Act 1953. You can rely on the information presented in this document which provides advice on the operation of the Luxury Car Tax system.

1. The luxury car tax threshold for the 2007-2008 financial year is equal to the car limit and is used to determine if luxury car tax is payable.[1]

2. The car limit for the 2007-2008 financial year is $57,123. This limit is indexed annually in line with movements in the motor vehicle purchase sub-group of the Consumer Price Index.

3. For the 2005-2006 year this index was 395.4 and for the 2006-2007 year the index was 396.3 resulting in an indexation factor of 1.002, that is, more than 1. The law requires that where the indexation factor is less than 1, the car limit is not to be indexed.[2] As the indexation factor is more than 1, the car limit has increased to $57,123 for the 2007-2008 financial year.

Example

4. On 2 July 2007 a dealer supplies a car with a GST inclusive value of $66,000.

5. As the GST inclusive value exceeds the luxury car tax threshold of $57,123, luxury car tax may be payable.

Date of effect

6. This Determination applies to the financial year commencing 1 July 2007.

Commissioner of Taxation
27 June 2007

Footnotes

[1]
1 Subsection 25-1(3) of the A New Tax system (Luxury Car Tax) Act 1999. The car limit is also used to calculate depreciation deductions under the income tax law - see Taxation Determination TD 2007/22.

[2]
2 Subsection 960-270(2) of the Income Tax Assessment Act 1997.

Not previously issued as a draft.

References

ATO references:
NO 2004/6084

Previous Rulings/Determinations:
LCTD 2003/1
LCTD 2004/1
LCTD 2005/1
LCTD 2006/1

ISSN: 1448-4919

Related Rulings/Determinations:

TD 2007/22

Subject References:
car limit
luxury car tax threshold

Legislative References:
TAA 1953 Sch 1 105-60
ANTS (LCT)A 1999 25-1(3)
ITAA 1997 960-270(2)

LCTD 2007/1 history
  Date: Version: Change:
You are here 27 June 2007 Original ruling  
  20 April 2016 Withdrawn  

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