15 Nov Fringe Benefit Tax exemption on electric cars

By Eric Zhang

Recently introduced into the House of Representatives, the Electric Car Discount Bill aims to provide incentives for purchasing electric cars, including a Fringe Benefits Tax (FBT) exemption for some models.

Why electric vehicles?
It will help Australians reduce CO2 emissions from their cars, benefiting the environment.

Under the current law, a car benefit usually attracts FBT or other forms of tax. The Bill, if passed in its current form, will give FBT exemptions to cars that:
• are provided by employers to their current employees
• are zero or low-emission vehicles, such as battery electric cars, hydrogen fuel cell cars, or hybrid cars.
• have a retail price below $84,916 (i.e., the contemporary luxury car tax threshold)
• are first held and used on or after 1 July 2022

Such an exemption could mean significant savings on FBT, creating advantages for employers and employees.

What’s next?
The final detail of this incentive is yet to be confirmed but could have major impacts on the effectiveness of this legislation. As soon as this information comes to hand, we will communicate it to you.