FBT Exemption for Electronic Cars

The electric car discount bill 2022, received a Royal Assent on 12 December 2022. This bill exempts from FBT tax those eligible electric cars and associated car expenses. This bill encourages road users to buy and use electric cars in order to decrease Australia’s carbon emissions from the transport sector by making electric cars more within their means. Import tax and FBT are removed for these electric cars.

To be eligible the following conditions must be met.

The car should be a zero or low emissions vehicle,
is held by the provider and used by or made available for private use on or after 1 July 2022,
is used by a current employee or their associates and
the value of the car at the first retail sale, (including delivery fees, accessories, and options) must be below the luxury car tax threshold for fuel-efficient vehicles.

A second-hand electric car may be eligible for the exemption, as long as it was first purchased new on or after 1 July 2022.

To be a qualified as zero or low-emission vehicle, the following conditions must be satisfied:

The vehicle should be battery electric, a hydrogen fuel cell electric or plug-in hybrid electric vehicle and
The vehicle is designed to transmit a load of less than 1 ton and a capacity of 9 passengers including the driver.

Note that plug-in hybrid electric cars will not be considered zero or low-emission vehicles from 1 April 2025.

The following associated car expenses are also exempt from FBT:

Registration
Insurance
Repairs and maintenance and
Fuel including electricity to charge and run electric cars.

FBT exemption will be available until 30 June 2025 and is subject to review after 3 years.

Know more about this topic. Contact us at Progress CA.

Yan (Jenny) Qi CA

Founder of Progress CA Pty Ltd

Tel. no. 0403 050 779

Email: info@progressca.com.au

Website: www.progressca.com.au

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