The ATO modified their rules regarding payment of Fringe Benefits Tax (FBT) for electric cars for this financial year. As of 1 July 2022, employers are now exempt from paying FBT benefits provided for electric cars.

If the car meets the following criteria:

• The car is a zero or low emissions vehicle.
• The car is held and used for the first time on or after 1 July 2022.
• The car is used by a current employee or their associates (i.e. family members).
• The luxury car tax has never been payable on the importation or sale of the car.

Registration, insurance, repairs and maintenance expenses provided by employers for eligible cars will also be exempt from FBT.

Despite the exemption, you will still need to determine the taxable value of the benefits provided and include it in your employee’s Reportable Fringe Benefits Amount (RFBA).

Get in touch if you have any questions regarding FBT.