The Government has announced a proposal to:
- remove fringe benefits tax (FBT) on eligible electric cars from 1 July 2022, and
- include the value of these exempt car fringe benefits in the calculation of an employee’s reportable fringe benefits amount.
This will apply from the FBT year beginning 1 April 2022.The Government intends to review this exemption after 3 years, to consider electric car take-up.
The Bill applies to fringe benefits provided on or after 1 July 2022 for cars that are eligible zero or low emissions vehicles that are first held and used on or after 1 July 2022.The FBT exemption relates to car fringe benefits and therefore will only apply to vehicles that are ‘cars’ for FBT purposes; other types of electric vehicles are excluded. Additionally, to be eligible for the exemption the value of the car at the first retail sale must be below the luxury car tax threshold for fuel efficient cars, i.e., $84,916 for the 2023 tax year.
