electric cars are the future and many western countries have incentivised purchases of new electric vehicles. countries like norway, the uk and even our cousins over in new zealand have created generous tax bonuses for people who have purchased a new electric vehicle.
over here in australia, however, we’ve been a little behind in recent years. but that’s all going to change apparently; the labor government has kept its promise to exempt electric cars from the fringe benefits tax (fbt).
first, let’s explain the fringe benefits tax and why this promise by the government is a good thing for you. when your employer provides you with a benefit like a car for personal use, they have to pay a 47% tax on the cost of that vehicle – this is known as fringe benefits tax.
but the australian labor government is changing the rules on fbt completely. if you’re an employer that provides workers with an electric vehicle or plug-in hybrid, you won’t have to pay a cent in fringe benefits tax on that vehicle – so long as it’s below the luxury car tax threshold for fuel efficient vehicles ($77,565 in 2020-21).
this is going to give a huge incentive to employers who provide cars as a benefit for their employees. by making the most of labor’s fbt exemption for electric vehicles, you can save thousands and thousands of dollars on providing your employees with greener vehicles.
base on the labor party’s proposal, if you are prvoiding an employee with a $50,000 electric vehicle like the nissan leaf. in this case, you’ll be saving up to $9,000 a year thanks to the fbt exemption.
don’t worry, this isn’t just a good thing for employers looking to implement green vehicles and cut costs: it also has some great implications for employees. fbt is often passed on to employees and is deducted from their wages.
if this is an arrangement that your employer has previously upheld, this means you’re also exempt from having to pay fbt on electric vehicles and plug-in hybrids.
labor has also scrapped import tariffs for various imported evs and plug-in hybrids. in the past, some evs have come with 5% import tax, adding thousands of dollars to the price tag. evs from countries that doesn’t currently have a free trade agreement with australia on evs will be exempt from import tariffs.
fingo can help you score some pretty sweet deals on electric vehicles, whether you’re an employer, employee or simply a private buyer. from expert fleet management to car finance and leasing, fingo are australia’s specialists in innovative vehicle solutions. get in touch with the team at fingo to drive greener cars and save more money.
