Canada: Federal luxury tax proposals for vehicles, aircraft, and boats
A proposed framework for a new luxury tax that would apply to vehicles, aircraft, and boats.
Proposed framework for a new luxury tax that would apply to vehicles, aircraft, and boats
The Department of Finance released details of its proposed framework for a new luxury tax that would apply to vehicles and aircraft with final sales prices above $100,000* and for new boats with final sales prices above $250,000.
In general, the new luxury tax would be the lesser of: (1) 20% of the amount of the total sales price in excess of $100,000 for vehicles and aircraft and in excess of $250,000 for boats; or (2) 10% of the total sales price. The federal luxury tax would have an effective date of 1 January 2022, but in some situations, sales agreements signed since 20 April 2021 could be subject to the luxury tax.
The release from Finance outlines its proposals for the new luxury tax obligations for vendors, importers, and purchasers and discusses related administrative guidelines and transition rules. Businesses that sell vehicles, aircraft, and boats are requested to provide comments by 30 September 2021.
Read an August 2021 report prepared by the KPMG member firm in Canada
$=Canadian dollar
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