CADA advocacy pushed Ottawa to release details on Luxury Tax on Vehicles
August 8, 2022
As the implementation date for Bill C-19, the federal luxury tax on vehicles over $100,000, approaches on September 1 of this year, CADA has continued its pressure on Ottawa to provide important details, which finally came last week, after months of continued advocacy from CADA.
Canada’s automotive sector, including manufacturing, distribution, retailing and financing segments, joined together to send a letter to Minister of Finance Freedland and Minister of National Revenue Lebouthillier to ask the Canada Revenue Agency and Finance Canada to release the information immediately or delay the implementation of the luxury tax, to allow the auto industry enough time to properly adapt to the new tax structure.
The letter states that “Over the past many months, our sector has engaged with officials within your department and others on the topic of the luxury tax, and participated robustly in all of the consultations that have taken place. With the Luxury Tax set to come into effect in less than a month, and no details available for our sector, it is increasingly frustrating and worrying to be approaching a seismic change in our industry without having any of the necessary information to facilitate a smooth transition to this new tax structure.”
The Canada Revenue Agency had previously published guidance for dealers regarding how to register through the CRA online portal in order to obtain and hold inventory tax-free. This registration will apply to all manufacturers, wholesalers, retailers or importers of vehicles priced over $100,000, who will all need to file quarterly Luxury Tax and Information Returns.
After receiving the letter from CADA and other industry partners earlier last week, CRA finally released the missing detailed information on Friday.
“Since the beginning, CADA has been at the table with the federal government, making the case for how they should be protecting our industry as one of the most important industries in Canada,” said Tim Reuss, President & CEO of CADA. “While the government decided to go ahead with a luxury tax, despite our repeated presentations about how that would hurt the industry, we have continued to work with them to push for a fairer, less disruptive policy for dealers. We will continue our advocacy to the Minister of Finance, Finance Committee, and all Parliamentarians to make sure that dealers have the information they need to be able to successfully and smoothly maintain their business.”
To give dealers more insight about this issue, CADA hosted the first “Navigating the Federal Luxury Tax” webinar with MNP, one of Canada’s largest tax and accounting consulting firms, to offer dealers a detailed overview of the information we have on the luxury tax. The recordings of the English and French sessions can be found on the CADA website, for members only. Additional sessions will be offered shortly now that there is new information available.
CADA Newsline will continue updating the situation as more information becomes available.
You can access the following information here:
New CRA information & guidelines
CRA online Luxury Tax registration
Industry letters sent to the Federal Government