Treasury Laws Amendment (Electric Car Discount) Bill 2022 provides for an FBT exemption for cars that are classified as zero or low emission vehicles and are provided by employer to an employee as a car fringe benefit.
Some key points include:
– Exemption is limited to vehicles that have a value below the luxury car tax threshold for fuel efficient cars.
– The exemption is intended to apply to benefits provided from 1 July 2022, but won’t generally be available to cars that were already owned on this date.
– Can apply to cars that are provided under a salary sacrifice arrangement.
– It is important to confirm whether the specific car model in question will qualify for the exemption. For example, certain hybrid vehicles could potentially qualify for the exemption, while other hybrid vehicles won’t.
– While the measure provides an exemption from FBT in relation to qualifying vehicles, the value of the benefit will still be taken into account in determining the reportable fringe benefits amount of the employee.