Canadian Government Announces Details on Implementation of Luxury Tax

Canada’s Department of Finance has issued a release providing details on the implementation of the new luxury tax that was approved as part of the Budget Implementation Act, 2022, No. 1 (Bill C-19). Part 4 of the legislation enacted the Select Luxury Items Tax Act, which created a new taxation regime for domestic sales, and importations into Canada, of certain new motor vehicles and aircraft priced over CAD 100,000 and certain new boats priced over CAD 250,000. The luxury tax applies if the total price or value of the subject luxury item at the time of sale or importation exceeds the relevant price threshold. Where the relevant price threshold is exceeded, the tax is calculated at the lesser of 10% of the total price of the item and 20% of the total price of the item that exceeds the relevant price threshold.

Source Orbitax

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