Electric vehicles now exempt from Fringe Benefits Tax
As a result of the Fringe Benefits Tax (FBT) exemption passing Parliament recently, certain electric vehicles (EVs) provided as a car benefit to employees on or after 1 July 2022 can be exempt from FBT. However, as always with the ATO, certain criteria must be met, including:
The EV must be held and in use by the Employer on or after 1 July 2022
It cannot have been subject to the luxury car tax when purchased.
And in the 2023 financial year, the EV must have been purchased for less than the luxury car tax threshold for fuel efficient vehicles, being $84,916.
The ATO have released a fact sheet to assist employers with determining any FBT they have when it comes to employees be provided an electric car. The fact sheet can be used as a guide for employers and what is required when they have provided an employee with the private use of an electric vehicle. The factsheet includes key points like:
FBT exemption may apply to a car benefit arising if either
An employer allows current employees, or their associates, to use a zero or low emissions vehicle (electric vehicle) for their private use
the electric vehicle is considered available for your current employees', or their associates', private use under FBT law.
Providing employees with an at home charging station is a fringe benefit - the benefit is not an exempt associated benefit.
The exemption is set to be reviewed by mid-2027 by the Australian government
This factsheet can be viewed through the ATO.