Electric Cars are FBT Free
The Treasury Laws Amendment (Electric Car Discount) Bill 2022 proposes to remove Fringe Benefits Tax (FBT) on eligible cars provided by employers to current employees for private use.
The exemption applies under the following circumstances:
- To eligible electric vehicles first held and used after 1st July 2022.
- To cars with a purchase price below $84,916 for 2022/23 (which is the luxury car tax threshold for fuel-efficient cars).
- When the car is a 'zero or low emissions vehicle'.
Provided all the conditions for FBT exemption are satisfied, salary packaging an electric car for employees private use is 100% FBT exempt. I.e. the costs are tax deductible to the employer and no FBT is payable on the employees tax free benefit.
When the Bill becomes law, the FBT exemption will apply from 1st July 2022.
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
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