*** Update – 12 December 2022 *** This has now received Royal Assent.
The following is general in nature. Please contact us or your tax agent as the attached is not tax advice.
An employer who provides an employee with an electric vehicle will not be liable for fringe benefits tax on the employee’s private use. The proposed new legislation comes into effect for electric vehicle first held by employers on or after 1 July 2022. To be eligible for the exemption, the electric vehicle must be below the luxury car limit, which is currently sitting at $84,916.
So whilst you may not get a tax write off, if you salary package the electric vehicle (such as a novated lease) there may be scope to have the full amount of the lease payments and other associated costs deducted from your gross package. This is similar to getting a tax deduction for the lease and running costs of the vehicle.
Before considering salary packaging we recommend you speak with a qualified tax advisor.
Treasury Laws Amendment (Electric Car Discount) Bill 2022
The Bill amends the FBTAA 1986 to exempt from fringe benefits tax cars that are zero
or low emissions vehicles held by the provider and used by or made available for
private use of employees. 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. This is to encourage a greater take up of electric cars by Australian road users to
reduce Australia’s carbon emissions from the transport sector, by making electric cars
more affordable. The operation of the amendment will be reviewed after three years in
light of electric car take up.