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FBT exemption for electric cars

Until recently, the FBT consequences for providing electric cars to employees were effectively the same as any other car.

However, from 1 July 2022, FBT is no longer payable on benefits provided for eligible electric cars and associated expenses.

Practically, this exemption will be relevant for the
first time in the 2023 FBT year.

Broadly, benefits provided for electric cars will be exempt from FBT where the following criteria are met:

  • the car is a zero- or low-emissions vehicle;
  • the first time the car is both held and used is on or after 1 July 2022;
  • the car is used by a current employee or their associate(s) (e.g., a family member); and
  • luxury car tax has never been payable on the importation or sale of the car.

Registration, insurance, repairs, maintenance and fuel expenses provided for eligible electric cars are also exempt from FBT.

Note that, while the benefit is exempt from FBT, the taxable value of the benefit must still be determined when working out whether an employee has a reportable fringe benefits amount to be included on their income statement or payment summary.

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general advice disclaimer

The information provided on this website is a brief overview and does not constitute any type of advice. We endeavour to ensure that the information provided is accurate however information may become outdated as legislation, policies, regulations, and other considerations constantly change. Individuals must not rely on this information to make a financial, investment or legal decision. Please consult with an appropriate professional before making any decision.

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