From 1 January 2020, primary producers can claim a refund of luxury car tax (LCT) they have paid on one eligible vehicle per financial year, up to a maximum of $10,000 (it used to be $3,000), for vehicles delivered to them on or after 1 July 2019.
If your client lodged a claim for an eligible vehicle delivered on or after 1 July 2019, they won’t need to make another claim to receive the increased refund amount.
From 1 January 2020 when the law comes into effect, the ATO should adjust your client’s refund based on the amount they have already received.
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. This factor (eight thirty-thirds) represents the difference between the current LCT rate of 33% and the previous 25% rate.
Credits and refunds
Credits for luxury car tax (LCT) can only be claimed if your client is not registered for goods and services tax (GST). A refund may be available if they’re a primary producer or tourism operator who buys luxury vehicles.
Credits
If your client is not registered for GST, and therefore can’t make an LCT adjustment on a business activity statement (BAS), they may however be entitled to a credit for LCT paid if:
- they overpaid LCT on a sale – that is, the supplier paid an amount of LCT that was not legally payable and your client settled on that overpaid LCT
- they’ve paid LCT on a sale, or paid LCT on an importation, where they could have quoted but were unable to quote because they were unregistered at the time of supply or importation
- they’ve exported a luxury car (on which LCT has been paid) that is a GST-free export.
Your client is entitled to a credit only if no-one else has made a valid claim for a credit in relation to the credit entitlement. Note this claim for a credit must be made 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, your client must use the approved Application for luxury car tax credit – entities not registered for GST form, and lodge it within four years of becoming entitled to the credit
- on a GST-free export, they 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. Readmore
