Electric Cars FBT Exemption
From 01/07/2022 employers do not pay FBT on eligible cars and associated car expense.
How can I be eligible for the exemption?
1. The car is a zero or low emissions vehicle.
2. The first time the car is both held and used is on or after 01/07/2022
3. The car is used by a current employee or their associates.
4. Luxury car tax has never been payable on the importation or sale of the car.
What is a zero or low emissions car?
The car must meet both of the followings to be qualified for the exemption:
1. It is a:
Battery electric vehicle
Hydrogen fuel cell electric vehicle, or
Plug-in hybrid electric vehicle
2. It is a car designed to carry a load of less than 2 tonne and fewer than 9 passengers. (including driver)
Other matters:
1. To be qualified, you must first owned or used the car on or after 01/07/2022.
2. The value of the electric car must be below LCT (currently is 84,916) at the time it is first sold in a retail sale and in any subsequent sale.(For second hand car, you need to determine if the car was subject to LCT at any time in the past).
3. The associated car expenses including registration, insurance, repairs or maintenance and fuel are all exempt from FBT.
4. Home charging station is not a car expense associated with providing a car fringe benefit for electric cars.
5. Although the private use of an eligible electric car is exempt from FBT, employers still need to work out the taxable value of the reportable fringe benefits amount and included in the reports.
6. Please note that from 1 April 2025, a plug-in hybrid electric vehicle will not be considered a zero or low emission vehicle under FBT law. However you can continue to apply exemption if both of the following requirements are met:
· Use of the plug-in hybrid electric vehicle was exempt before 1 April 2025.
· You have a financially binding commitment to continue providing private us of the vehicle on and after 1 April 2025. For this purpose, any optional extension of the agreement is not considered binding.
