Canada: Luxury Tax Adopted

The Canadian government's proposed luxury tax on certain vehicles, including essentially all new general aviation aircraft purchases, will be enacted on Sept. 1, 2022. The tax applies to new cars and aircraft with a retail sales price of over $100,000 and to boats over $250,000. The tax would be calculated at the lesser of 20 percent of the value above the threshold ($100,000 for cars and personal aircraft, $250,000 for boats) or 10 percent of the full value of the car, boat, or aircraft. These regulations would provide that the tax is applied to “written sales agreements” entered into after Jan. 1, 2022. Certain aircraft sold for export will be exempted.