In our June 2022 newsletter we outlined the FBT exemption for electric cars that was proposed by the incoming government. Legislation to implement this exemption has now been passed, and the exemption applies to eligible electric cars and associated car expenses from 1 July 2022.
Battery, hydrogen fuel, and plug-in hybrid electric vehicles all qualify for the exemption, provided they are designed to carry a load of less than 1 tonne and fewer than nine passengers (including the driver).
Plug-in hybrid vehicles will cease to be eligible for the exemption from 1 April 2025, except where the vehicle was held before that date and there is a financially binding commitment to continue providing it.
Registration, insurance, repairs and maintenance, and fuel (including electricity) are also exempt from FBT if they are provided for an eligible electric car.
The government will review this exemption by mid-2027 to consider electric car take-up.
More information and examples can be found on the ATO website.
Kreston Stanley Williamson
*Correct as of 16 December 2022
*Disclaimer – this article has been produced by Kreston Stanley Williamson as a service to its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this article, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under professional standards legislation.
