Ottawa, Ontario – Details on an incoming luxury tax by the Government of Canada were released July 15. The new rules will affect manufacturers, wholesalers, retailers and importers.
As of Sept. 1, the Select Luxury Items Tax Act proposed in Budget 2021 will come into effect, targeting certain vehicles and aircraft above $100,000 and some vessels above $250,000. This would require vehicle, aircraft or vessel registration when the respective vehicle is first imported, or sold.
According to the 2021 federal budget, this tax would be calculated from the lesser of two values: 10 percent of the item’s price, or 20 percent of the item’s value beyond the $100,000 mark. This would change to $250,000 for select vessels.
While the press release provides a more concrete look at the automotive market of the near future, draft regulations may render certain manufacturers exempt from the tax.
The full list of impacted vehicles is detailed in Notice LTN1, linked here.