Taxation

OUR POLICIES

Luxury Car Tax

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The LCT rate of 33 per cent applies to the GST-exclusive value of the car (including accessories) above the LCT threshold of $64,132 for regular cars and $75,526 for fuel efficient vehicles. Revenue for 2016-17 was $664 million and is projected to rise to $720 million in 2020-21.

The AADA along with consumer and other industry groups have long called for the abolition of the LCT, as it is an inefficient tax which discourages the uptake of safer and environmentally friendly vehicles. Furthermore, it is a non-tariff trade barrier which undermines our trading efforts with key allies.

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Passenger Vehicle Tariff

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The passenger vehicle tariff is a 5 per cent duty on vehicles entering Australia from a non- Free Trade Agreement (FTA) countries. While Australia has concluded FTAs with major source countries such as Thailand, Japan and Korea, hundreds of thousands of vehicles from Europe, the United Kingdom, South Africa and elsewhere still incur the tariff. Passenger vehicle tariff revenue was $540 million in 2016-17.

The cessation of local vehicle manufacturing in Australia presents an opportunity to re-evaluate the way passenger vehicles are taxed. Removing the passenger vehicle tariff can lead to significant reductions for consumers purchasing new cars.

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Company Tax

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Due to the high value of their stock, new car dealers are in a unique position of having high turnovers and fairly low profit margins.

The AADA supports the recent reduction in company tax to 27.5 per cent for companies with a turnover of less than $50 million, but urges all parliamentarians to support the Government’s proposal to extend this tax relief to all businesses.

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