The exemption will take effect from 1 July 2022 for those vehicles first held and used from that date.
The exemption applies to a range of electric vehicles, including the Mitsubishi Outlander Aspire PHEV, Kia EV6 Air, Tesla Model 3 Long Range, and Polestar 2 Standard Range Single Motor. However, second-hand electric cars will only qualify for the exemption if they were originally purchased new from 1 July 2022.
Although the value of the benefit is exempt from FBT, the value of these exempt car fringe benefits will be included in the calculation of an employee's reportable fringe benefits amount and potentially be reportable in their tax return.
An employee has an RFBA (reportable fringe benefits amount) if the total taxable value of certain fringe benefits provided to them (or their associate) is more than $2,000 in an FBT year. The RFBA must be reported through Single Touch Payroll or on the employee's payment summary.
The FBT exemption for electric motor vehicles is a great opportunity for employees to save money on their electric car purchase. Those who are considering taking advantage of the exemption should be aware of the eligibility criteria and the associated costs.
If you wish to establish a program for your employees or for use within your own business, please get in touch with us for further assistance and guidance.