The Government has introduced legislation into Parliament to implement an electric car discount.
The discount will involve:
Exemption from Fringe benefits tax (FBT) – a 47% tax on electric cars that are provided by the employer for private use
Import tariffs – a 5% tax on some imported electric cars
A car benefit is an exempt benefit for a year of tax if:
the car is a zero or low emissions vehicle
the value of the car at the first retail sale was below the luxury car tax threshold for fuel efficient vehicles (2022-23 threshold is $84,916), and
the car is first held and used on or after 1 July 2022.
Zero or low emissions vehicles are cars that are:
battery electric vehicles;
hydrogen fuel cell electric vehicles; and
plug-in hybrid electric vehicles.
The new exemption will only apply to electric cars that are first held and used on or after 1 July 2022.
The exemption will not apply to hybrid electric vehicles that are not plug-in.
It will not apply to electric cars that employers have provided to employees for their use before 1 July 2022. This measure is yet to enter the Senate and is not yet law, however, will be retrospective when passed.
