From 1 July 2022, employers will not pay fringe benefits tax (FBT) on benefits provided for eligible electric cars and associated car expenses.
Benefits provided for electric cars are exempt from FBT if all the following criteria apply:
• 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 associates (such as family members)
• luxury car tax has never been payable on the importation or sale of the car.
Registration, insurance, repairs (or maintenance) and fuel expenses provided for eligible electric cars are also exempt from FBT.
It’s important to note that despite the exemption, not-for-profits will still need to determine the taxable value of the benefits provided, and include it in their employee’s reportable fringe benefits amount (RFBA). They must report the RFBA on their employee’s income statement or payment summary.
To view further detail from the ATO, click here