It’s Happening: Time to Register for the Luxury TaxAfter several years of negotiations and delays, the Canadian Luxury Tax will come into force on September 1, 2022.
If you sell or import goods that will be subject to the luxury tax for your business, you will be required to register with the CRA under the Select Luxury Items Tax Act.
Once registered, a business will file quarterly Luxury Tax and Information Returns, similar to the filing system for GST returns. Individuals who import subject items for their own personal use do not have to register, and will instead remit the tax during the import process.
The tax will apply to certain new vehicles and aircraft priced over $100,000 and certain new vessels priced over $250,000 and will be calculated at the lesser of either 20% of the value above the price threshold or 10% of the total value of the item. “New” in this case means that the vehicle, vessel or aircraft has never been registered with the Government of Canada before. Once the tax has been paid on an item once, it will not be collected again if that item is resold. The tax will only apply to items manufactured after 2018.
Online registration is now open for all commercial manufacturers, retailers, wholesalers and importers. Businesses are required to be registered by the date of their first sale or import of an item that is subject to the luxury tax. By registering before September 1, businesses can obtain and hold tax-free inventory of cars, aircraft and vessels.
More information about how to apply is online here.
Below is a roundup of links with further information about the new tax:
Our detailed guide to the luxury tax
Luxury Tax technical information
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
After several years of negotiations and delays, the Canadian Luxury Tax will come into force on September 1, 2022.
If you sell or import goods that will be subject to the luxury tax for your business, you will be required to register with the CRA under the Select Luxury Items Tax Act.
Once registered, a business will file quarterly Luxury Tax and Information Returns, similar to the filing system for GST returns. Individuals who import subject items for their own personal use do not have to register, and will instead remit the tax during the import process.
The tax will apply to certain new vehicles and aircraft priced over $100,000 and certain new vessels priced over $250,000 and will be calculated at the lesser of either 20% of the value above the price threshold or 10% of the total value of the item. “New” in this case means that the vehicle, vessel or aircraft has never been registered with the Government of Canada before. Once the tax has been paid on an item once, it will not be collected again if that item is resold. The tax will only apply to items manufactured after 2018.
Online registration is now open for all commercial manufacturers, retailers, wholesalers and importers. Businesses are required to be registered by the date of their first sale or import of an item that is subject to the luxury tax. By registering before September 1, businesses can obtain and hold tax-free inventory of cars, aircraft and vessels.
More information about how to apply is online here.
Below is a roundup of links with further information about the new tax:
Our detailed guide to the luxury tax
Luxury Tax technical information
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
