FBT exemptions on EV
Broadly, a business that acquires a company EV (which is being used for private purposes/parked at private residences of an employee) will not be subject to FBT, if the vehicle meets all of the following conditions:
- the car is a zero or low emissions vehicle
- the car is held and used on or after 1 July 2022
- the car is used by a current employee or their associates (such as family members)
- below the luxury car tax threshold (currently $84,916)
Further, a business may choose to claim a full tax deduction for the electric cars up to $64,741 for the 2022-23 year under the “temporary full expensing provisions.” At this stage, the temporary full expensing provisions ends 30 June 2023.
- if a model valued at about $50,000 is provided by an employer through this arrangement, the estimated FBT exemption would save the employer up to $9,000 a year per car.
- for individual/employees using a salary sacrifice arrangement to pay for the same model, their saving would be up to $4,700 a year. A salary sacrifice arrangement involves the individual employee reducing their gross income to pay for the car, which therefore effectively reduces their personal tax bill.
If you have a business that pays employees (including yourself). The above concessions will apply to you.
If you have any questions, please do not hesitate to contact our office.
Call: 0755804455
E-mail: info@maxaccountants.com.au
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