The luxury tax, originally proposed in Canada’s 2021 budget, received Royal Assent on 23 June 2022. The tax will apply to new cars and aircraft with a retail sales price over CAD 100,000 and to vessels over CAD 250,000, calculated at the lesser of 20% of the value above the relevant threshold and 10% of the full value of the item. The luxury tax will come into effect on 1 September 2022 for vehicles and vessels, but the entry into force date for aircraft may be deferred.
Source BDO
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