15104 views

0 Members and 1 Guest are viewing this topic.


Offline AshSimmonds

  • Geekitecht

  • Joined: Feb 2006

  • Drives: GF's shitbox :(
  • Location: Adelayed
  • Name: Humble Narrator
  • www: AshSimmonds.com
http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2004379/00001

Quote
ATO Interpretative Decision
ATO ID 2004/379 (Withdrawn)

Goods and Services Tax
Luxury Car Tax and racing cars


Issue

Is the entity, a motor vehicle dealer, making a taxable supply of a luxury car under subsection 5-10(1) of the A New Tax System (Luxury Car Tax) Act 1999 (LCT Act), when it sells a racing car that is designed for use only on a racetrack?

Decision

No, the entity is not making a taxable supply of a luxury car under subsection 5-10(1) of the LCT Act when it sells a racing car that is designed for use only on a racetrack.

Facts

The entity is a motor vehicle dealer that is registered for goods and services tax (GST). The entity sells a racing car. The sale of the racing car is a taxable supply under section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 .

The racing car is designed for use only on racetracks and cannot be used on public roads in any country in the world. The racing car is motor powered and designed to carry a load of less than two tonnes and fewer than nine passengers.

Reasons for Decision

Section 5-10 of the LCT Act sets out the requirements that must be met for an entity to make a taxable supply of a luxury car. The first requirement is that the entity must supply a 'luxury car' (paragraph 5-10(1)(a) of the LCT Act).

A 'luxury car' is defined by subsection 25-1(1) of the LCT Act as 'a car whose luxury car tax value exceeds the luxury car tax threshold.'

'Car' is defined in section 27-1 of the LCT Act as a:

       motor vehicle (except a motor cycle or similar vehicle) that is designed to carry a load of less than 2 tonnes and fewer than 9 passengers or a limousine (regardless of the number of passengers it is designed to carry).

'Motor vehicle' is also defined in section 27-1 of the LCT Act as 'a motor powered road vehicle (including a 4 wheel drive vehicle)'. The term 'road vehicle' is not defined in the LCT Act.

Neither The Macquarie Dictionary 1997 3rd edn, The Macquarie Library Pty Ltd, New South Wales nor The Australian Concise Oxford Dictionary, 1997, 3rd edn, Oxford University Press, South Melbourne define the term 'road vehicle'.

Guidance on the meaning of the term 'road vehicle' can be found in the Motor Vehicle Standards Act 1989 (the object of which is to achieve uniform vehicle standards to apply to road vehicles used for transport in Australia).

Section 5 of the Motor Vehicle Standards Act defines a 'road vehicle' to mean a road motor vehicle, a road trailer or a partly completed road vehicle. Section 5 of the Motor Vehicle Standards Act further defines the term 'road motor vehicle' as:

   
          a motor vehicle designed solely or principally for the transport on public roads of people, animals or goods, or

   
          a motor vehicle that is permitted to be used on public roads.

Additionally, in Sales Tax Ruling SST 13 the Commissioner considered the meaning of 'road vehicle' for the purposes of the sales tax legislation. Paragraph 3.2 of SST 13 states:

       The term 'road vehicle' refers to the class of vehicle, not to the actual use to which a particular vehicle may be put. It is a road vehicle if it is in a class of vehicle that is designed for use on public roads and it would be a road vehicle even thought it may never be used or registered for use on public roads.

Having considered these definitions, for the purposes of the LCT Act a road vehicle is a vehicle that is designed for use on public roads. The term 'public roads' is not restricted to public roads in Australia. It includes public roads in any country in the world.

The racing car is not designed for use on public roads in any country in the world. It is designed to be used only on a racetrack. The racing car is not a road vehicle for the purposes of the LCT Act and therefore, it is not a luxury car.

As the requirement in paragraph 5-10(1)(a) of the LCT Act is not met, the entity is not making a taxable supply of a luxury car under subsection 5-10(1) of the LCT Act when it sells a racing car that is designed for use only on a racetrack.

Date of decision: 1 March 2001




Offline TTz

  • Mr White

  • Joined: Jun 2007

  • Location:
  • Drives:
So does LCT apply to second hand cars as well ?
[url=http://aussieexotics.com/forum/lamborghini/mr-White-



Offline TTz

  • Mr White

  • Joined: Jun 2007

  • Location:
  • Drives:
So how come a dealer doesnt have to pay /charge LCT is the car is 2 years old ?

Or was registered as a demo for 2 years..?
[url=http://aussieexotics.com/forum/lamborghini/mr-White-



Offline AshSimmonds

  • Geekitecht

  • Joined: Feb 2006

  • Drives: GF's shitbox :(
  • Location: Adelayed
  • Name: Humble Narrator
  • www: AshSimmonds.com
Previous discussion: http://aussieexotics.com/forum/cars/luxury-car-tax-t1694.0.html

LCT is *supposedly* there to stifle buyers from purchasing non-local vehicles, if they were honest about that though they would simply apply some other O/S non-domestic vehicle tax to the entire gamut of O/S sourced cars up to the highest price locally available comparable model - say up to $100k for the top-range Commode-door (or whatever, I have no idea). 

That way even Hyundai/etc buyers would be paying 33% more for their vehicles and that would have a palpable effect on the domestic vehicle industry when 1,000 people have to second-think when choosing between an Astra and a Sonata (or whatever) vs the one guy looking at an Aston/Ferrari/Porsche/etc.

People buying cars over $100k - LCT does nothing, what local vehicle could you possibly spend that on as a legitimate alternative to what you are looking at from the European market?




Offline scud

  • 300kph+ club
  • Rocket man

  • Joined: Mar 2006

  • Location:
  • Drives:
Is there LCT on them ?
Or are specific race cars exempt?

But the sound of a newbie for $230k.... would be good.

I'll end up getting one of Cruikshanks 996 or 997 ones.... I'm sure he will work it into increase sponsorship for next year...
no lct on race cars, grab a 997



Offline TTz

  • Mr White

  • Joined: Jun 2007

  • Location:
  • Drives:
I agree... LCT is nothing more than a joke.
I'm amazed it got passed as it is discrimnates only those who are purchasing O/S Lux cars over the Local Tax office limit of $57k...

Then theres FBT, GST, Stamp duties etc for the govt to get more $$ out of them...  Adn wasnt LCT meant to go as part of GST reforms ?

New G at $350k on road.... without LCT....
[url=http://aussieexotics.com/forum/lamborghini/mr-White-



Offline scud

  • 300kph+ club
  • Rocket man

  • Joined: Mar 2006

  • Location:
  • Drives:
I agree... LCT is nothing more than a joke.
I'm amazed it got passed as it is discrimnates only those who are purchasing O/S Lux cars over the Local Tax office limit of $57k...

Then theres FBT, GST, Stamp duties etc for the govt to get more $$ out of them...  Adn wasnt LCT meant to go as part of GST reforms ?

New G at $350k on road.... without LCT....
wait till they tax the house worth over $2m. plenty will sell their house to their business before it comes in for a huge profit tax free, then pay rent back for the next 20 years. easy.



Offline AshSimmonds

  • Geekitecht

  • Joined: Feb 2006

  • Drives: GF's shitbox :(
  • Location: Adelayed
  • Name: Humble Narrator
  • www: AshSimmonds.com
From LCT thread...

I just priced a Statesman (3.6L) and it's about $61k, so I looked on the US BMW site and found you can get a 550i for the same price (in AUD), then I checked the Oz BMW site for the same 550i - base price is $170k. :eek:  ($39k of which is tax)




Offline AshSimmonds

  • Geekitecht

  • Joined: Feb 2006

  • Drives: GF's shitbox :(
  • Location: Adelayed
  • Name: Humble Narrator
  • www: AshSimmonds.com



Offline Ferrari Fissatore

  • Soap Dodger

  • Joined: Jan 2007

  • Drives: its obsession
  • Location: under its skin



Related Topics

  Subject / Started by Replies Last post
0 Replies
786 Views
Last post Sat, 27 Apr, 2013 - 21:10
by NM2255
17 Replies
6768 Views
Last post Fri, 24 May, 2013 - 18:42
by adam01
1 Replies
1460 Views
Last post Wed, 16 Jul, 2014 - 10:49
by scud
0 Replies
1336 Views
Last post Thu, 21 Aug, 2014 - 16:38
by innotechexhaust@gmail.com
3 Replies
1687 Views
Last post Mon, 17 Nov, 2014 - 14:50
by Peter901


Latest Discussions

BOARD TOPIC MEMBER POSTED
[ Funny Cool Stoopid ] it's funny cause i'm drunk!! anotherforumuser Today at 00:33
[ Cars ] Maserati - The only Assetto Corsa in Australia ? EZ95 Yesterday at 20:27
[ Off Topic ] Real Estate allanuber Yesterday at 19:46
[ Off Topic ] Music Fil-Ski Yesterday at 19:35
[ Cars ] Underground Parking at Home Joel Yesterday at 17:45
[ Cars ] Stolen R8 dodger Yesterday at 10:56
[ Porsche ] Porsche 991 GT3 NBTBRV8 Yesterday at 10:46