Electric car taxes and rebates revealed.

The Federal Government recently introduced the Treasury Laws Amendments (Electric Car Discount) Bill 2022, which will reduce the upfront and ownership cost of electric vehicles (“EVs”) so that more families who want them, can afford them.  If enacted it not only be good for motorists, employees and their workers and most of all for climate action.  ** Note - This Bill has not yet been legislated, we will advise once it is and confirm the final details that were passed.

The legislation is proposed to amend the Fringe Benefits Tax Assessment Act 1986 to exempt from FBT the use of eligible electric cars made available by employers to employees.

The exemption is proposed to apply to zero or low emission vehicles, including battery EVs, hydrogen fuel cell electric cars and plug-in hybrids, first made available for use on or after 1 July 2022.  To be eligible for the tax exemption, the value of the car must be below the luxury car tax threshold for fuel-efficient vehicles ($84,916 for 2022-23).

If implemented, it will be as an ongoing measure and reviewed after three years to ensure it remains effective. 

The Government will also introduce changes to remove the 5% import tariff for eligible EVs.  This rate will apply to imports from all nations, except those for which a free trade agreement (“FTA”) is in effect.  With the removal of FBT and import tariffs, the prices for eligible models could be slashed by nearly $5,000.

Here at home in WA, the Zero Emission Vehicle (“ZEV”) Rebate Scheme has already been rolled out, alongside a plan to expand the state’s charging network which will see 49 stations installed across WA expected to be fully operational by January 2024.  The rebate scheme will provide ZEV owners with a $3,500 rebate which is available to 10,000 eligible vehicles licensed in WA, or for three years following the announcement (10 May 2025), whichever comes first.  Hybrid vehicles (including plug-in hybrids) are not eligible under the scheme.

The federal legislation as well as state based incentives is expected to encourage greater take up of EVs and contribute to reducing transport emissions, especially given the rising costs of fuel.

If you require further information in relation to eligible electric vehicles, tax exemptions etc, please get in touch with us. Otherwise watch this space for notification for the final legislation being passed.