On 27 July 2022, the Government introduced the Treasury Laws Amendment (Electric Car Discount) Bill 2022 into Parliament.
This Bill implements the Government’s plan to remove fringe benefits tax (FBT) to make electric cars (aka ZEVs – Zero and Low Emission Vehicles) cheaper so that more families who want them can afford them.
The legislation will amend the Fringe Benefits Tax Assessment Act 1986 to exempt from FBT the use of eligible ZEVs made available by employers to employees.
This FBT exemption will apply to battery electric cars, hydrogen fuel cell electric cars and plug‑in hybrid electric cars. (Sorry Toyota Hybrid owners!)
The exemption will be available for eligible electric cars with a first retail price below the luxury car tax threshold for fuel efficient cars ($84,916 for 2022‑23) first made available for use on or after 1 July 2022.
Interestingly, car benefits that are exempt from FBT under this exemption will continue to be included in an employee’s individual fringe benefits amounts for the purpose of determining the employee’s reportable fringe benefits amount (RFBA). This is achieved by proposing to amend section 135P of the FBTAA. This is the first time a specific measure has been introduced to treat an exempt benefit as still being a reportable fringe benefit. Presumably, this is aimed at preventing ZEVs from being used to reduce income-tested benefits and payments.
We eagerly await the draft Bill’s receipt of Royal Assent and will let you know when the legislation FBTAA has passed.
Remember, you can reach out to your Halletts adviser anytime if you have questions in relation to the purchase or salary packaging of your Electric Vehicle.
For more information: https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/electric-car-discount-bill-introduced-parliament?utm_source=miragenews&utm_medium=miragenews&utm_campaign=news