In exciting news for employers and employees alike, the Electric Car Fringe Benefits Tax (FBT) Exemption legislation has now passed.
This means any eligible new EVs purchased after 1 July 2022 or second-hand EVs first registered after the same date will be completely exempt from the Fringe Benefits Tax (FBT) if they fall below the luxury car tax threshold ($84,916 in 2022-23). Any import tariffs (where previously applicable) will also be fully waived, making EVs more affordable to own.
This will reduce the cost of EVs for fleet-operated businesses because the exemption from FBT is applicable to EVs where the employer providing benefit vehicles to their employees and having a private use component.
These discounts will be available to the following types of EVs below the luxury car tax threshold:
It’s important to note that employees will still be required to report the vehicle as a Reportable Fringe Benefit Amount (RFBA). This could have an impact on the employee's benefits or concessions such as family assistance payments, HECS/HELP, child support obligations and Medicare levy surcharge. More information about the RFBA can be found here.
Why is the Federal Government enacting the Electric Car Discount Bill?
EVs just make up 3.39% of new car sales in Australia, which means Australia lags far behind the rest of the world when it comes to take up of EVs. This is despite the fact that according to the Electric Vehicle Council’s Consumer Attitudes Survey 2021, more than half of Australians say they would consider buying an EV as their next car. By enacting this Policy, the government intends to help drive down the cost of purchasing an EV and incentivise take up of low emission, fuel-efficient cars, so we can move towards a greener future.
What are the benefits of having an electrified fleet?
As a business, when you choose to transition your existing fleet to an EV fleet, it can help you make it more sustainable, efficient and cut down on operational costs. By taking this step, you’ll also become an active player in contributing to Australia’s net zero emissions target by 2050.
In the long run, EVs are cheaper to run, maintain and service. Ongoing servicing costs can be a pain point for petrol and/or diesel-powered vehicles that have done more kilometres. Servicing an EV is comparatively easier, less frequent and cheaper than their petrol/diesel counterparts.
Further, the cost of using electricity to charge an EV is about 40% less than what you will spend on petrol if you use a similar vehicle over the same distance.
How can Smartfleet help?
Smartfleet can help with your transition strategy to electrify your fleet and walk you through how our clients can benefit from the exemptions.
If you’re interested in transitioning to EVs, then we’d love to help. Get in touch with us today.