FBT Exemption For Electric Cars

FBT Exemption For Electric Cars | Tax & Accounting Services

The FBT concession does come with a few strings attached.

  1. The electric vehicle must be below the luxury car tax threshold (currently $84,916 for 2023 GST inclusive)
  2. The exemption only applies to cars held after 1 July 2022.
  3. An electric car is battery electric vehicle, a plug-in hybrid electric vehicle or a hydrogen fuel cell electric vehicle.

One of the most in demand relative so supply vehicles on the market is the Toyota Rav 4 but sadly the versions sold in Australia don’t meet the plug-in criteria (the Rav 4 Prime is currently not sold in Australia.

Further points to note are:

  1. A second-hand car bought after 1 July qualifies
  2. A car bought before 1 July but only delivered until after 1 July qualifies
  3. It only applies to cars (vehicles that carry fewer than 9 people and a load of less than 1 tonne).

It’s worth noting the government intends to remove the 5% import tariff on certain electric vehicles in the near future.

If you would like to know more about how the FBT exemption for electric cars could reduce your business tax liability or if you need help accounting for the purchase please contact one of our accountants at the Victoria Point office.