Luxury car tax how to complete your activity statement

Istructios for busiesses with luxury car tax obligatios Luxury car tax how to complete your activity statemet For more iformatio, visit www.ato.gov.au NAT 7391-07.2012

OUR COMMITMENT TO YOU We are committed to providig you with accurate, cosistet ad clear iformatio to help you uderstad your rights ad etitlemets ad meet your obligatios. If you follow our iformatio i this publicatio ad it turs out to be icorrect, or it is misleadig ad you make a mistake as a result, we must still apply the law correctly. If that meas you owe us moey, we must ask you to pay it but we will ot charge you a pealty. Also, if you acted reasoably ad i good faith we will ot charge you iterest. If you make a hoest mistake i tryig to follow our iformatio i this publicatio ad you owe us moey as a result, we will ot charge you a pealty. However, we will ask you to pay the moey, ad we may also charge you iterest. If correctig the mistake meas we owe you moey, we will pay it to you. We will also pay you ay iterest you are etitled to. If you feel that this publicatio does ot fully cover your circumstaces, or you are usure how it applies to you, you ca seek further assistace from us. We regularly revise our publicatios to take accout of ay chages to the law, so make sure that you have the latest iformatio. If you are usure, you ca check for more recet iformatio o our website at www.ato.gov.au or cotact us. This publicatio was curret at July 2012. AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA, 2012 You are free to copy, adapt, modify, trasmit ad distribute this material as you wish (but ot i ay way that suggests the ATO or the Commowealth edorses you or ay of your services or products). PUBLISHED BY Australia Taxatio Office Caberra July 2012 JS 24865

INTRODUCTION Luxury car tax (LCT) applies to cars with a GST-iclusive value that exceeds the LCT threshold ($59,133 for 2012 13). LCT is payable i additio to GST, but it is ot payable o the full value of the vehicle it is payable o 33% of the GST-exclusive value that exceeds the LCT threshold. LCT also applies to fuel efficiet vehicles that are above the fuel efficiet car limit ($75,375 for 2012 13). You accout for LCT whe completig your activity statemet for GST, usig the same tax period. For more iformatio about LCT, refer to Luxury car tax (NAT 3394). Do t complete the LCT sectio of your activity statemet if you report ad pay GST usig a pre-prited GST istalmet amout (optio 3 o the activity statemet). We have icluded your LCT i this amout. You will still eed to report LCT payable (1E) ad LCT refudable (1F) whe lodgig your Aual GST retur. This is due at the same time as your tax retur. If you report ad pay GST aually (optio 4), you do t have to report LCT o mothly or quarterly activity statemets. You will eed to report LCT o your Aual GST retur. WHO MUST PAY LCT AND WHO CAN DEFER PAYING IT? You must pay LCT o all luxury cars that you purchase or import uless you quote your Australia busiess umber (ABN) i the approved format to the supplier (or to Australia Customs ad Border Protectio Service, i the case of importatios). You are etitled to quote your ABN if you ited to use the car oly for oe of the followig quotable purposes, ad for o other purpose, as follows: holdig it as tradig stock, other tha holdig it for hire or lease coductig research ad developmet for its maufacturer exportig it i circumstaces where the export is GST free. The LCT becomes due ad payable whe you o-sell the luxury car or stop usig it for a quotable purpose. This might happe if you hold a car as tradig stock ad start usig it for private purposes or if it becomes a capital asset of your busiess. LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT 1

YOUR ACTIVITY STATEMENT Below is a example of a quarterly activity statemet. Your activity statemet will cotai all of your reportig requiremets ad may ot look exactly like this example. EXAMPLE: Busiess activity statemet frot This bar code is used by our electroic scaers to idetify your activity statemet. This is the reportig period that the activity statemet covers. It s usually a moth or a quarter. The documet ID is a uique idetifier for each activity statemet you receive. Your Australia busiess umber (ABN). These are importat dates. They idicate whe you have to lodge your activity statemet ad whe you have to make a paymet. This is the method (cash or o-cash) you ve chose to report GST if you re registered. These are your cotact details. We use this iformatio to cotact you if there is a problem with your activity statemet. To make sure we sca your activity statemet correctly: use a black pe leave boxes blak if they do t apply to you, uless we ask you to write 0 roud dow to whole dollars (do t show cets) do t report egative figures or use symbols such as +, -, /, $ do t write ay additioal iformatio o your activity statemet cotact us separately if your details have chaged. 2 LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT

YOUR ACTIVITY STATEMENT EXAMPLE: Busiess activity statemet back This is the sectio where you summarise your reportig obligatios ad calculate whether you are due a refud or you eed to pay. This is where you sig ad date your activity statemet. This is the paymet advice that you use whe makig a paymet. If you have a LCT, wie equalisatio tax (WET), or frige beefits tax (FBT) obligatio, all three boxes will appear o your activity statemet. Igore the boxes that do t relate to your activities. LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT 3

LCT LABELS ON YOUR ACTIVITY STATEMENT 1E LUXURY CAR TAX Iclude at 1E all the LCT that you have to pay for the curret reportig period. Geerally, you calculate this amout for each luxury car as follows: 1 Take the LCT value (price icludig GST, before LCT is added). 2 Deduct the LCT threshold ($59,133 i 2012 13). 3 Multiply this amout by 10/11 to exclude GST. 4 Multiply the result by 33% to work out the LCT payable. 5 Add the LCT value ad the LCT payable to work out the total amout that you charge a customer for the luxury car. Example 1 explais these steps further. I some cases (for example, secod-had cars) LCT may have bee previously payable o the car. The LCT payable o the sale that you make may be reduced by the amout previously paid. Example 2 outlies how to calculate the LCT payable by you i these circumstaces. 4 LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT

LCT LABELS ON YOUR ACTIVITY STATEMENT EXAMPLE 1: Workig out the LCT You sell a car for $80,000 plus $8,000 GST. The LCT value is $88,000. The LCT threshold for 2012 13 is $59,133. 1 Work out the amout subject to LCT: LCT value LCT threshold $88,000 $59,133 = $28,867 2 As the $28,867 amout icludes GST, the ext step is to multiply this amout by 10/11 to exclude GST: $28,867 10/11 = $26,242.72 3 The effect of excludig GST is that LCT is payable o $26,242.72 ot $28,867. 4 Multiply the result by the LCT rate of 33% $26,242.72 33/100 = $8,660.09 LCT payable 5 To reflect the GST ad LCT compoet, your sale price should be: $88,000 (icludig GST) + $8,660.09 LCT = $96,660.09 6 Write the figure of 8,660 at 1E. EXAMPLE 2: Workig out the LCT whe you sell a luxury car o which LCT was previously payable You sell a car for $95,043 o which LCT of $6,050.33 was previously paid. 1 As your sale price icludes GST ad LCT, you first eed to remove them from the amout that is above the threshold. To do this, use the followig formula: (Price of the car LCT threshold) 1.43 ($95,043 $59,133) = $25,111.88 1.43 2 Multiply this by the LCT rate of 33% $25,111.88 33/100 = $8,286.92 3 To work out how much LCT you must pay, reduce this amout by the LCT of $6,050.33 that was previously paid. $8,286.92 $6,050.33 = $2,236.59 LCT ow payable 4 To work out how much GST you must pay, work out the LCT value: Price LCT payable = LCT value $95,043 $2,236.59 = $92,806.41 5 GST will be oe-eleveth of this amout 1/11 $92,806.41 = $8,436.94 6 O sellig the car, you must pay $2,237 LCT ad $8,437 GST. 7 Write the figure 2,237 at 1E. LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT 5

LCT LABELS ON YOUR ACTIVITY STATEMENT Icrease i LCT amout Also iclude at 1E ay icreases to the amout of LCT that was paid o a previous activity statemet. These are kow as icreasig adjustmets. This might arise if ay of the followig occur: there has bee a icrease i the price of the car you quoted your ABN whe you purchased or imported the car ad use it for a o-quotable purpose you ve recovered a bad debt i relatio to a luxury car you previously had a decreasig adjustmet ad ow use the luxury car for a o-quotable purpose. Example 3 explais how to calculate a icrease i LCT payable for a icrease i the price of the car. Example 4 explais how to calculate the icrease i the LCT payable if you use the car for a o-quotable purpose. EXAMPLE 3: LCT icreases followig a icrease i your sale price You sold a car for $95,043.41, icludig $8,436.95 GST ad $8,286.92 LCT which was payable to us. Durig a later tax period you ad the purchaser agreed to icrease the price of the car by $10,000 to $105,043.41. 1 The $10,000 icludes GST ad LCT, which you must first remove before you ca work out your icreasig LCT adjustmet. To do this, apply the followig formula: Icrease i price 1.43 $10,000 = $6,993 1.43 2 Multiply this by the LCT rate of 33% to arrive at your icreasig LCT adjustmet. $6,993 33/100 = $2,307.69 (the icreasig LCT adjustmet) 3 Write the figure 2,307 at 1E. You will also have to make a adjustmet for GST. EXAMPLE 4: LCT icreases followig a chage i quotable purpose You are a geuie motor vehicle dealer or wholesaler ad are therefore etitled to defer payig LCT o luxury cars you purchase as tradig stock for resale. You do this by quotig your ABN to your supplier at the time of purchase (see Who must pay LCT ad who ca defer payig it o page 1). You quoted your ABN whe purchasig a luxury car that you iteded to hold as tradig stock. The LCT value was $88,000. You did ot pay LCT o the supply. You later use the car as a executive vehicle. Sice you are usig the car for a purpose other tha a quotable purpose, you will have a icreasig LCT adjustmet of $8,660.09, as worked out i the first example (see Workig out the LCT o page 5). Write the figure 8,660 at 1E. If you have othig to report at 1E, leave the boxes blak. 1F LUXURY CAR TAX REFUNDABLE Iclude at 1F ay adjustmet to LCT that was paid by you i a earlier tax period if a chage of circumstaces meas LCT is ow refudable. This might happe if ay of the followig occur: there is a decrease i the price of the car you have writte-off a bad debt i relatio to a luxury car or a debt has bee overdue for 12 moths or more you did ot quote your ABN at the time of the purchase or import ad both of the followig apply you ited to use the vehicle for a quotable purpose you have used the vehicle for a quotable purpose oly the sale is cacelled. If you have othig to report at 1F, leave the boxes blak. 6 LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT

LCT LABELS ON YOUR ACTIVITY STATEMENT EXAMPLE 5: LCT decreases followig a decrease i price You sold a car for $95,043.41, icludig $8,436.95 GST ad $8,286.92 LCT, which was payable by you i a previous tax period. Durig a later tax period you ad the purchaser agreed to decrease the price of the car by $10,000 to $85,043.41. 1 The $10,000 icludes GST ad LCT, which must be take out to eable you to work out your decreasig LCT adjustmet. To do this, apply the followig formula: Decrease i price 1.43 $10,000 = $6,993 1.43 2 Multiply this by the LCT rate of 33% to arrive at your decreasig LCT adjustmet. $6,993 33/100 = $2,307.69 is the decreasig LCT adjustmet. 3 Write the figure 2,308 at 1F. EXAMPLE 7: LCT decreases followig a cacelled sale You sold a car for $95,043.41, which icluded $8,436.95 GST ad $8,286.92 LCT, which was paid by you i a earlier tax period. Durig a later tax period you ad the purchaser agreed to cacel the sale. You have a decreasig LCT adjustmet of $8,286.92. Write the figure 8,287 at 1F. You will also have to make a adjustmet for the amout of GST. Do ot make adjustmets to correct mistakes i a previous activity statemet. Refer to Correctig GST mistakes (NAT 4700) or phoe us o 13 28 66. You will also have to make a adjustmet for the amout of GST. EXAMPLE 6: LCT decreases followig a chage i quotable purpose You did ot quote your ABN whe purchasig a luxury car because the car was to be used by a executive of the dealership. The price you paid for the car was $95,043.41, icludig $8,286.92 LCT. However, whe the car was delivered the executive did ot use the car ad istead you held it as tradig stock. You have a decreasig LCT adjustmet of $8,286.92. Write the figure 8,287 at 1F. LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT 7

LODGING AND PAYING The due date for lodgig ad payig is pre-prited at the top right had corer of your activity statemet. You ca lodge ad pay electroically, by mail or i perso, but you eed to do it o time to avoid iterest ad pealties. Eve if you have o amouts to report for the period or are havig difficulty payig, it s still importat to make sure we receive your activity statemet o time. HOW TO LODGE Electroically You ca lodge electroically usig oe of the followig: the Busiess Portal Stadard Busiess Reportig (SBR) the electroic commerce iterface (ECI) your registered tax aget or registered BAS aget. For more iformatio about electroic lodgmet: visit www.ato.gov.au/olieservices phoe us o 13 28 66. By mail Mail your origial, completed activity statemet with your cheque usig the pre-addressed evelope. If you misplace the evelope, you ca sed your activity statemet to: VIC, TAS, WA, SA, NT NSW, QLD, ACT Australia Taxatio Office Australia Taxatio Office Locked Bag 1936 Locked Bag 1793 Albury NSW 1936 Perith NSW 1793 It s importat that you sed your origial activity statemet, ot a copy or a versio geerated from a commercial software package. If you do use a commercial package, make sure you copy the iformatio oto your origial statemet. HOW TO PAY By BPAY You ca use your fiacial istitutio s BPAY facility to pay by phoe or over the iteret. Use Biller code 75556. The BPAY referece umber is the electroic fuds trasfer (EFT) code o your activity statemet. By credit card You ca make a credit card paymet olie or by phoe usig the Govermet EasyPay service. This service oly accepts paymets betwee $10 ad $50,000. You will eed a curret Visa, MasterCard or America Express card ad your EFT code. Pay olie usig the secure olie service at www.optussmartpay.com/govermeteasypay-ato or pay by phoe o 1300 898 089. A card paymet fee applies to trasactios made usig this service. This fee is the o-gst compoet of the amout we icur for these trasactios. You will be iformed of the fee amout ad trasactio totals before you are asked to cofirm paymet. The Govermet EasyPay service will provide a receipt that displays both paymet ad card paymet fee labelled ATO o your credit card statemet. By direct credit You ca trasfer fuds directly to us usig iteret bakig or a computer based bakig software package. By direct debit You will eed to complete a direct debit request to have your paymet electroically deducted from your omiated bak accout. By mail You ca sed a cheque usig the pre-addressed evelope provided. If you have lodged your activity statemet electroically, make sure you iclude the origial paymet advice slip. Make cheques payable to the Deputy Commissioer of Taxatio ad cross them Not egotiable. Do t attach your cheque with pis or staples ad do t sed cash. Registered to BPAY Pty Ltd ABN 69 079 137 518 8 LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT

LODGING AND PAYING At Australia Post You ca pay i perso at Australia Post outlets usig your origial paymet advice slip. You ca pay with cash (a $3,000 limit applies), moey order or cheque. EFTPOS is available at most Australia Post outlets for savigs ad cheque accouts. To order additioal or replacemet paymet slips, phoe us o 13 72 26. If you make a paymet at Australia Post, or you pay electroically, you must still sed your completed activity statemet to us either by mail or electroically uless we advise you otherwise o the form. WHAT IF YOU CAN T LODGE AND PAY ON TIME? You must phoe us o 13 28 66 to check if alterative arragemets ca be made. You must still lodge your activity statemet by the due date, eve if you ca t pay o time. The geeral iterest charge will apply to ay amout ot paid by the due date. A pealty may also apply if you fail to lodge o time. EXPECTING A REFUND? Geerally, if you have a ABN, we ca oly pay refuds directly ito your omiated fiacial istitutio accout, so it s essetial that we have your correct accout ad brach (BSB) umbers. Your omiated accout must be at a brach of the istitutio i Australia. For more iformatio about direct credit or BPAY: phoe 1800 815 886 betwee 8.00am ad 6.00pm, Moday to Friday email paymet@ato.gov.au For more iformatio about BPAY, cotact your fiacial istitutio. For more iformatio about direct debit: phoe 13 11 42 betwee 8.00am ad 6.00pm, Moday to Friday email eft-iformatio@ato.gov.au If you eed to chage your fiacial istitutio accout details, phoe us o 13 28 66. You will eed to provide proof of idetity. This icludes either your tax file umber (TFN), ABN or ame ad specific idetifiers (such as iformatio from a previously geerated tax otice). If you do t have a ABN, we will pay your refud by cheque. We may ot issue a refud if you have ot lodged a previous activity statemet or if you have provided icorrect bak details. If you are due a refud, we may apply it to offset ay govermet debt that you may have, such as a Child Support Agecy debt. LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT 9

CHECKLIST Have you: filled i the LCT boxes that apply to you? checked your calculatios? copied amouts correctly betwee boxes? You may eed to: complete ay other sectios that apply to you ad copy the totals to the summary sectio calculate if you must make a paymet or if you re etitled to a refud complete the paymet or refud details cotact us to update your address (see How do I update my address? o page 11). You must: sig ad date your activity statemet lodge your origial activity statemet by the due date pay ay amouts you owe by the due date. RECORD KEEPING You should keep a copy of your activity statemet ad the records you used to prepare it for five years after they are prepared, obtaied or the trasactios completed, whichever is the later, i writig ad i Eglish. Iformatio stored o magetic tape or computer disk is ot i a writte form. The records must be i a form that is readily accessible ad easily coverted ito Eglish. 10 LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT

FREQUENTLY ASKED QUESTIONS WHAT IS A LUXURY CAR? A luxury car is a car with a GST-iclusive value that exceeds the LCT threshold. WHAT IS A FUEL EFFICIENT CAR? A fuel efficiet car is a car which has a fuel cosumptio ot exceedig seve litres per 100 kilometres ad is below the fuel efficiet car limit. WHEN IS LCT PAYABLE? LCT is payable o all taxable supplies or taxable importatios of luxury cars. This applies uless the purchaser or importer quotes their ABN (i the approved form) to the supplier or, if imported, to Australia Customs ad Border Protectio Service. For more iformatio, refer to Sectio 4: Quotig your ABN i Luxury car tax (NAT 3394). WHAT CARS ARE NOT SUBJECT TO LCT? LCT does ot apply to a car if ay oe of the followig applies: it is a emergecy vehicle it is ot GST-free ad is specially fitted for trasportig disabled people i wheelchairs it is a motor home or camperva it is a commercial vehicle ot pricipally desiged to carry passegers it has a supply date of more tha two years after the date of its maufacture i Australia (or if imported, etry for home cosumptio). I AM A CAR DEALER AND I SELL LUXURY CARS THAT ARE SUBJECT TO LCT. DO I NEED TO FILL IN THE LCT PAYABLE BOX AT 1E? You have to pay LCT ad must fill i box 1E. Ay busiess, particularly motor vehicle retailers, wholesalers, maufacturers or fiaciers who make a taxable supply of a luxury car must fill i box 1E. HOW DO I WORK OUT THE LCT REFUNDABLE AT BOX 1F? 1F icludes ay decreasig adjustmets to LCT due to a chage i circumstaces, where it turs out that you have overpaid LCT o a previous activity statemet (see Luxury car tax refudable o page 6). CAN I CLAIM A CREDIT FOR LCT THAT IS PAYABLE ON A LUXURY CAR? You ca t claim a credit for LCT regardless of the extet you use the vehicle i carryig o your eterprise. However, you ca claim a GST credit of oe-eleveth of the car limit ($5,224 for the fiacial year 2012 13). CAN I MAKE A VOLUNTARY PAYMENT? You ca make a volutary paymet, but you do t make them o your activity statemet. If you have a EFT code, you ca make a volutary paymet by BPAY or by direct credit. If you do t have a EFT code, phoe us o 1800 815 886 for help. Alteratively, you ca mail your paymet to: VIC, TAS, WA, SA, NT NSW, QLD, ACT Australia Taxatio Office Australia Taxatio Office Locked Bag 1936 Locked Bag 1793 Albury NSW 1936 Perith NSW 1793 It s very importat that you iclude the followig iformatio with your volutary paymet: paymet type, for example, LCT paymet your ABN or TFN your full ame ad address (as show o the frot of your activity statemet) a cotact phoe umber, icludig the area code. LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT 11

WHAT IF I MAKE A MISTAKE? You ca correct a mistake by strikig it out i black pe. Write the ew iformatio as close as possible to the boxes for the label. You ca also use tape whiteout to correct errors. Do ot use liquid whiteout this causes problems with scaig, which will delay the processig of your activity statemet. WHAT IF I REALISED THE MISTAKE AFTER LODGING MY ACTIVITY STATEMENT? Usually, you eed to lodge a revised activity statemet phoe us o 13 28 66 to obtai a revised activity statemet form. Revised activity statemets are also available from the Busiess Portal, if you are a registered user. HOW DO I UPDATE MY ADDRESS? We ecourage you to esure the address details we have for you are correct to esure you receive the correct mail for each of your tax obligatios i a timely maer. To update your address, phoe us o 13 28 66 or log i to the Busiess Portal. To register for the busiess portal or for more iformatio: visit www.ato.gov.au/olieservices phoe us o 13 28 66. 12 LUXURY CAR TAX HOW TO COMPLETE YOUR ACTIVITY STATEMENT

MORE INFORMATION For a copy of ay of the publicatios or forms referred to i this guide or for other iformatio o luxury car tax: visit our website at www.ato.gov.au phoe us o 13 28 66 write to us at Australia Taxatio Office PO Box 3524, ALBURY NSW 2640 If you do ot speak Eglish well ad eed help from the ATO, phoe the Traslatig ad Iterpretig Service o 13 14 50. If you are deaf, or have a hearig or speech impairmet, phoe the ATO through the Natioal Relay Service (NRS) o the umbers listed below: TTY users, phoe 13 36 77 ad ask for the ATO umber you eed Speak ad Liste (speech-to-speech relay) users, phoe 1300 555 727 ad ask for the ATO umber you eed iteret relay users, coect to the NRS o www.relayservice.com.au ad ask for the ATO umber you eed.