On 25 November 2022, the Senate passed the Treasury Laws Amendment (Electric Car Discount) Bill 2022 with amendments. The amendments were accepted by the House of Representatives on 28 November and the Bill now awaits Royal Assent.
This bill was introduced by the Government in August 2022 to provide an exemption from Fringe Benefits Tax (“FBT”) for a car fringe benefit attributable to an eligible low or zero emission car (i.e., battery electric vehicles; hydrogen fuel cell electric vehicles; and plug-in hybrid electric vehicles). The exemption is intended to encourage a greater take up of fuel-efficient cars and reduce Australia’s carbon emissions.
For more information in relation to this exemption see our previous article.
What were the amendments made by the senate?
The Senate made the following two amendments:
- The exemption for plug-in hybrid electric vehicles will cease to apply for new car fringe benefits provided on or after 1 April 2025. Arrangements in relation to plug-in hybrid electric vehicles entered into prior to 1 April 2025 will continue to be exempt. Further, the exemption for other types of electric vehicles (i.e. battery electric vehicles and hydrogen fuel cell electric vehicles) will remain in place.
- A mandatory review will have to be undertaken in three years to determine effectiveness of this exemption and confirm that it is achieving its purposes.
What are the next steps?
Clients should contact their Pitcher Partners representative to discuss their queries in relation to this exemption.