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Shipping Cars Overseas to Australia - Estimating Customs Duties

July 1, 2014 at 9:45 AM
The Australian government applies strict auto safety and environmental standards to cars coming into the country. In order to maintain these standards the customs duties, GST or Goods and Services Tax and potential value added tax or LCT, can add to an importer’s total cost. Despite this, the market for used cars, especially classic cars, remains strong. In addition, the near future may bring more good news. In January of this year, the Assistant Minister for Infrastructure and Regional Development approved an in-depth review of the governing Motor Vehicles Standards Act where one of the primary goals is to reduce regulatory costs to business.


Shipping Cars Internationally to Australia

The VIA and Transporting Autos to Australia

Getting started – As with any journey, what happens at the beginning can affect the result at the end. The first step when transporting autos into Australia is to determine if you need a Vehicle Import Approval, or VIA. Duties may vary according to the classification chosen in the VIA application so study your options carefully. It may also pay to check for exceptions although most cars are required to have a VIA in order to enter the country legally. Non-compliance can result in warehousing costs or total loss of the vehicle.

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Being taxed - Duty is assessed according to the tariff classification of the cars being imported. Classifications can vary depending on their age, use and other interpretive rules. A few vehicles may be exempt, such as those designated for the disabled, but if no exemptions apply, the rate equals 10% of the value of the taxable importation known as VoTI.
 

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Finding VoTI – VoTI is equal to the sum of (a) the customs value or CV; (b) any duty payable; and, (c) the amount paid or payable to transport the goods and to protect the goods for the transport, or T&I. The value added Luxury Car Tax, or LCT applies to vehicles designed to carry less than 2 tons and fewer than nine passengers and vehicles valued above a set $ amount. The LCT applies to all Limousines despite passenger limitations.

Sorting through the alphabet soup – The $ amount or “threshold” where the LCT kicks in for the 2014/14 financial year, is $60,316. For exemptions see www.ato.gov.au. The LCT rate is 33% and includes GST, GV and the cost of transport in its valuation. The LCT tax is limited to the GST exclusive amount that exceeds the threshold value of 60,316. This sounds more complicated than it is. To see the methodology for estimating customs duties, there is a great example provided on page 5 of this link.

Becoming comfortable with Aussie customs – Given the Aussie’s appetite for imported cars, understanding the custom’s process can be well worth the effort. A reliable international shipping company will provide you with partner agents who collect directly from you (not the shipper) and assist you along the way. WCS can provide you with an accurate, up to date, instant car shipping quote.

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