The ATO has introduced a Fringe Benefits Tax (FBT) Exemption on Electric Vehicles (EVs) backdating to 1 July 2022. This means from 1 July 2022, there are no FBT implications to a company providing private use of an EV.
What does this mean for you?
It means that if you are an employee, either for someone else or through your own company, you can buy yourself an EV, salary package the EV (commonly under a novated lease) and enjoy tax benefits and more cash in your bank account!
Associated car expenses (including electricity to charge your EV) are also deductible and exempt from FBT. Note: Home charging stations are generally excluded.
What are the eligibility criteria that I must meet?
- The car is a zero or low emissions vehicle. Note: Plug-in Hybrid EVs will cease to qualify from 1 April 2025 onwards
- The first-time use of the car must be after 1 July 2022. Note: This applies to new and second-hand cars. That is, if a brand-new car is pre-1 July 2022 it may not be eligible.
- The car is used by a current employee or their associates (such as family members.)
- The car must be below the Luxury Car Tax (LCT) threshold, which for the 2022-23 year is $84,916. Note: if purchasing a second-hand vehicle, you need to determine if it was subject to LCT at any time in the past.
Should you be considering the purchase of an EV and think this might apply to you, please contact a member of the team.
