The Australian Treasury Laws Amendment (Electric Car Discount) legislation was passed in 2021 and came into effect on July 1, 2022. As a result, electric vehicles provided as a car benefit by employers to their employees can be exempt from Fringe Benefits Tax (FBT) if certain conditions are met.
Under the new legislation, eligible employers can provide electric vehicles to their employees as a car benefit without incurring FBT, provided that the vehicles meet the eligibility criteria (below). This can provide a significant cost savings for both employers and employees, as electric vehicles are typically more expensive than their petrol or diesel counterparts.
The aim of the legislation is to encourage the uptake of electric vehicles in Australia and support the transition towards a low-emissions transport sector. By providing a tax incentive for electric vehicle adoption, the government hopes to encourage more Australians to consider purchasing electric vehicles and reduce the country's greenhouse gas emissions.
The eligibility criteria for the FBT exemption for electric vehicles, as outlined in the Australian Treasury Laws Amendment (Electric Car Discount) legislation, are:
The exemption applies to the car's taxable value, which is calculated based on the vehicle's purchase price and any associated costs such as registration and stamp duty. It does not cover any additional costs related to the vehicle's operation and maintenance.
To review the Treasury Laws Amendment (Electric Car Discount) Bill 2022, visit the Australian Government website.
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Ref: Treasury Laws Amendment (Electronic Car Discount) Bill 2022