• Prepare activity statement - luxury car tax (LCT)

    This screen allows you to record details of your luxury car tax (LCT) obligation for your activity statement.

    You account for the LCT when completing your activity statement for the tax period which applies for GST.

    Do not complete this section if you are paying a GST instalment amount (option 3) as these figures have been included in the calculation of your instalment amount.

    If you are using option 3 and paying an instalment amount, you will be required to report LCT payable (1E) and LCT refundable (1F) each year when you lodge your annual GST return.

    For information on completing this section, select from the options below:

    Working out the LCT amount

    The method of calculating the amount of LCT you need to pay depends on whether you are selling or importing a luxury car and whether LCT has already been paid on it.

    For more information, refer to:

    Adjustments, credits and refunds

    If you have overpaid or underpaid LCT and you:

    • are registered for GST and LCT, you can make an adjustment on your BAS. For more information on adjustments, see Adjustments.
    • aren't registered for GST and LCT, you can claim an LCT credit. For more information on LCT credits, see Credits and refunds.

    In some circumstances primary producers and tourism operators are eligible for a refund of part of the LCT they have paid on a luxury car.

    For more information see Refunds.

    Public institutions (museums, galleries and libraries) that are registered for GST and endorsed as a deductible gift recipient are entitled to make an adjustment on their BAS at label 1F for the LCT they have paid on a luxury car.

    For more information on adjustments, see Adjustments.

    Screen fields

    1E Luxury car tax payable

    Enter all the LCT that you are liable to pay in the current reporting period, including any increase to the previous amount of LCT payable.

    For information on completing this label, see 1E – Luxury car tax.

    Do not include any decimal point or cent amounts - round this value down to the nearest whole dollar amount. For example, instead of entering $124.75 you would enter $124 only.

    See here for examples of LCT payable calculations.

    1F Luxury car tax refundable 

    Enter any adjustment to LCT you have previously paid if a change of circumstances means LCT is now refundable. You'll also need to make an adjustment for the amount of GST.

    For information on completing this label see 1F – Luxury car tax refundable.

    Do not include any decimal point or cent amounts - round this value down to the nearest whole dollar amount. For example, instead of entering $124.75 you would enter $124 only.

    See here for examples of adjustments to LCT previously paid calculations.

    LCT payable calculation examples

    Example 1 - Increase in LCT  

    You sell a car worth $80,000 plus $8,000 GST. The LCT value is $88,000 and the LCT threshold for 2017-18 is $65,094.

    LCT is worked out using the following formula:

    (LCT value - LCT threshold) x 33/100 x 10/11

    LCT value - LCT threshold:

    $88,000 - $65,094 = $22,906

    As the $22,906 amount includes GST, the next step is to multiply this amount by 10/11 to exclude GST:

    $22,906 x 10/11 = $20,823.64

    The effect of excluding GST is that LCT is payable on $20,823.64 not $22,906

    Multiply the amount that is left by the LCT rate of 33%:

    $20,823.64 x 33% = $6,871.80 LCT payable

    The total amount that you charge is:

    $88,000 (including GST) + $6,871.80 = $94,871.80

    Enter the LCT amount of $6,871 at 1E. 

    Example 2 - How to work out the amount of LCT payable when a car has previously been subject to LCT  

    You sell a car for $95,017 on which LCT of $6,050.33 has previously been paid. As the price includes GST and LCT, you need to take out the GST and LCT on the amount above the threshold by using the following formula:

    (Price - LCT threshold) ÷ 1.43:

    ($95,017 - $65,094) ÷ 1.43 = $20,925.17

    Multiply this by the LCT rate of 33%:

    $20,925.17 x 33% = $6,905.31

    To work out the amount of LCT now payable, you need to reduce this amount by the LCT previously paid of $6,050.33:

    $6,905.31 - $6,050.33 = $854.98 LCT payable

    To calculate the GST payable, work out the LCT value

    LCT value = price - LCT now payable on the supply:

    $95,017 - $854.98 = $94,162.02

    GST payable will be 1/11 of this amount:

    1/11 of $94,162.02 = $8,560.18

    On the supply of the car $854.98 LCT and $8,560.18 GST is payable.

    Example 3 - Adjustment for an increase in price  

    You sold a car for $95,043.41, including $8,012 GST and $6,911.40 LCT which you have paid to the ATO. During a later tax period you and the purchaser agreed to increase the price of the car by $10,000 to $105,043.41.

    The $10,000 includes GST and LCT, which must be taken out to enable you to work out your increasing LCT adjustment. To do this, apply the following formula:

    Increase in price ÷ 1.43:

    $10,000 ÷ 1.43 = $6,993.01

    Multiply this by the LCT rate of 33% to arrive at your increasing LCT adjustment:

    $6,993.01 x 33% = $2,307.69 is the increasing LCT adjustment

    You will also have to make an adjustment for the amount of GST.

    Example 4 - Adjustment for a change in quotable purpose  

    You quoted your ABN when purchasing a luxury car which you intended to hold as trading stock. The LCT value was $88,000. You did not pay LCT on the supply. You later use the car as an executive vehicle. Since the car is being used for a purpose other than a quotable purpose, you will have an increasing LCT adjustment of $6,871.80, as worked out above in Example 1.

    Adjustment to LCT previously paid calculation examples

    Example 1 - Adjustment for a decrease in price  

    You sold a car for $95,043.41 including $8,012 GST and $6,911.40 LCT which you have paid to the ATO. During a later tax period you and the purchaser agreed to decrease the price of the car by $10,000 to $85,043.41.

    The $10,000 includes GST and LCT, which must be taken out to enable you to work out your decreasing LCT adjustment.

    To do this, apply the following formula:

    Decrease in price ÷ 1.43:

    $10,000 ÷ 1.43 = $6,993.01

    Multiply this by the LCT rate of 33% to arrive at your decreasing LCT adjustment:

    $6,993.01 x 33% = $2,307.69 is the decreasing LCT adjustment

    You will also have to make an adjustment for the amount of GST. 

     

    Example 2 - Adjustment for a change in quotable purpose  

    You did not quote your ABN when purchasing a luxury car because the car was to be used by an executive of the dealership. The price you paid for the car was $95,043.41, including $6,911.40 LCT.

    However, when the car was delivered, the executive did not use the car, but instead it was held as trading stock. You have a decreasing LCT adjustment of $6,911.40.

    Example 3 - Adjustment for a cancelled sale 

    You sold a car for $95,043.41, which included $8,012 GST and $6,911.40 LCT which you have paid to the ATO. During a later tax period you and the purchaser agreed to cancel the sale.

    You have a decreasing LCT adjustment of $6,911.40.

    For more information, refer to Luxury car tax.

    Screen buttons

    Cancel

    Selecting Cancel returns you to the Activity statement list screen. If you choose this option all of the data you have entered will be lost.

    Save and continue

    Selecting Continue/Save and continue will save the details you have entered for this activity statement and returns you to the Prepare activity statement screen. The amounts will be transferred to 1E and 1F on the activity statement.


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