Electric Vehicles Australia FBT Exemption

In this article, we shall be talking about Electric Vehicles Australia FBT Exemption. A car must possess specific characteristics to be eligible for Fringe Benefit Tax exemption. Payment you earn from your employer in addition to your monthly remuneration is called a Fringe Benefit.

Tax paid on these Fringe Benefits is called Fringe Benefits tax.

One can enjoy Fringe benefits tax exemption through a Novated car lease.

The law that started the Fringe benefits tax enjoyed by electric and hybrid electric cars in Australia is the Electric Vehicle Discount Law.

This allows employees to enjoy no tax deduction from their Gross salary in a Novated Electric car purchase deal.

Employees of most big companies in Australia enjoy a Novated electric car lease with ease.

In small companies, directions are normally sought from a Financier. The Financier ascertains if the employee is qualified for a Novated car lease.

Table of Contents

A list of FBT-exempt Vehicles In Australia

In Australia, some cars enjoy Fringe Benefit Tax Exemption. Electric vehicles and chargeable hybrids enjoy Fringe Benefits Tax Exemption.

They benefit from this exemption through a Novated lease. The table below is a comprehensive list of Fringe Benefit Exempt Vehicles in Australia.

CAR MANUFACTURER	EXAMPLES OF FBT-EXEMPT ELECTRIC OR HYBRID CARS PRODUCED
Alfa Romeo	Alfa Romeo Tonale Hybrid
BMW	BMW iX1 xDrive20BMW iX1 xDrive30BMW iX3 M SportBMW i4 eDrive35
BYD	BYD Atto 3 standardBYD Atto 3 ExtendedBYD Dolphin DynamicBYD Dolphin PremiumBYD Seal Dynamic
Nissan	Nissan LeafNissan Leaf E+
Mazda	Mazda MX-30 E35 AstinaMazda CX-60 P50e EvolveMazda CX-60 P50e GT
Ford	Ford Mustang Mach-E Select
Cupra	Cupra BornCupra Leon
Mitsubishi	Mitsubishi Eclipse Cross PHEV ESMitsubishi Eclipse Cross PHEV Aspire
MG	MG HS+ ExciteMG HS+ EssenceMG ZS EV ExciteMG ZS EV EssenceMG4 Excite 51MG4 Excite 64
Hyundai	Hyundai Kona Elite Standard RangeHyundai Kona Elite Long RangeHyundai Kona Highlander Standard RangeHyundai Kona Highlander Long RangeHyundai Ioniq 5 Dynamiq

Electric Vehicles Australia FBT Exemption

Electric Vehicles Eligible For FBT Exemption

An Electric car will be eligible for Fringe Benefits Tax exemption if;

The electric car is acquired after 1 July 2022.

The car owner is an employee of someone rather than him or herself.

It doesn’t fall in the luxury car tax category. Electric cars in the luxury cars category are made to pay luxury car tax during their importation period.

The mode of paying back the Novated lease is through the employee salary.

If the electric car runs on a battery rather than the normal fuel engines for the normal cars.

Its cargo capacity is under 1 tonne and takes less than 9 passengers.

Some of the electric vehicles eligible for FBT exemption, their average prices and dimension in millimeters are detailed in the table below.

NAME OF SOME VEHICLES ELIGIBLE FOR FBT EXEMPTION	APPROXIMATE PRICE	DIMENSION IN MILLIMITERS
Polestar 2 Standard Range	AU$67,400.00	Height: 1479 mm Width: 1985 mmLength: 4606 mm
Volvo C40 Recharge	Single motor: AU$74,990 Dual motor: AU$82,490	Length: 4440 mm1.Width: 1873 mm Height: 1591 mm
Peugeot e2008	AU$59,990	Length: 4300 mm Width: 1987 mm Height: 1550 mm
Mini Hatch SE Classic	AU$55,650	Length: 3850 mm Width: 1726 mm Height: 1432 mm
Hyundai Ioniq 5 Epiq	AU$85,000	Length: 4635mm Width:1890 mm Height: 1605mm

Are Electric Cars Exempt From Tax

No, electric cars are not entirely exempted from tax. Electric cars priced above AU$84,916 pay taxes on imports.

This is because they are considered luxury cars and are therefore charged Luxury Car Tax.

However Electric cars priced under AU$84,916 enjoy Fringe Benefit tax exemption through a Novated car lease. Also, Luxury Tax Exemption is enjoyed by Electric cars priced below AU$84,916.

The Australian Government has broadcasted that electric and hybrid cars will be made to pay some amount for every kilometer they travel.

Electric cars will be made to pay 2.5 cents for every kilometer they travel.

This road charge aims to raise revenue to handle all road projects effectively.

Hybrid cars will also be made to pay 2.0 cents for every kilometer they travel. Hybrid car drivers who rely heavily on their fuel engine for long travel will be made to pay for using fuel and the road respectively.

Is There Any Current Subsidy For Electric Car Owners In Australia?

Yes, currently there are electric car subsidies for electric car owners in Australia. After making the Electric Car Discount Bill a law in Australia, Electric and hybrid car owners can get up to AU$2,000 off the purchase price of their cars.

Additionally, Fringe Benefits tax exemption exists for electric car owners in a Novated lease deal. This also applies to hybrid car owners as well.

However, hybrid car owners will not enjoy Fringe Benefit Tax exemption after April 1, 2025. The luxury car Tax exemption cut-off amount has been raised to AU$89,332 for the 2023 to 2024 economic year.

The money employers save from Fringe Benefits tax exemption has boosted to AU$9,000.00 every year.

Employees on a Novated lease agreement also enjoy AU$4,700 on any Electric car purchased at AU$50,000. Taxes charged on imported electric cars that do not fall in the Luxury car tax category have been reduced.

You can enjoy up to AU$2,500 on price reduction provided your electric car is not luxurious.