In an effort to increase the adoption of electric vehicles (EVs) in Australia, both Federal and State Governments have introduced various tax concessions. These incentives align with the nation’s aim to provide cheaper and cleaner transport. Along with these concessions, Labor are aiming to build 117 fast charging networks over the next 5 years across Australia to aid the growth of electric vehicle take-up in Australia.

FBT exemption

In a major boost to employers, the recent federal budget introduced an exemption from FBT for electric cars. This concession is available for zero or low-emission vehicles including battery electric vehicles, hydrogen fuel cell electric cars and plug in hybrids. The value of the car needs to be below the luxury car threshold of $84,916 to be eligible for the FBT exemption. This new incentive is applicable on cars purchased after 1 July 2022.

However, the vehicle is still included for the purpose of working out an employee’s reportable fringe benefit amount (RFBA) for their income summary. The RFBA is used in the calculation of various government entitlements and liabilities. As such, this impact should be considered by the employee before entering into an EV salary sacrifice arrangement with their employer.

An employee on the highest marginal tax rate who salary sacrifices an $80,000 EV may end up better off by approximately $10,000 each year after tax compared to the old rules. Whereas an employer would be exempt for providing this benefit and saves FBT of approximately $15,000.

Import tariffs

The Federal Government has also introduced legislation to remove the 5% import tariff from 1 July 2022 for EVs under the luxury car threshold of $84,916. The tariff applies to battery electric cars, hydrogen fuel cell cars and hybrid cars that can be charged by plugging into an external source of power.

Queensland incentives

We note the following concessions are available in Queensland, however, several other states also have similar incentives.

Purchase rebate

The Queensland Government is offering a $3,000 rebate for Zero Emission Vehicles (ZEV) bought after 16 March 2022 with a purchase price of up to $58,000 incl GST.

There are currently two types of Zero Emission Vehicles (ZEV) included in the rebate:

• Battery Electric Vehicles (BEV)
• Hydrogen Vehicles (FCEVs)

This rebate is not available for any second-hand vehicles or hybrid and plug in hybrid vehicles.

Additionally, an individual can only claim the rebate once, while a Queensland business can claim up to five rebates per financial year.

Applications can be made online through the Queensland Rural and Industry Development Authority (QRIDA). The Queensland Government has pledged $45 million for this rebate scheme, which will be offered until funding is exhausted.

Stamp duty

As well as the rebate, the Queensland government has reduced stamp duty charged on electric and hybrid vehicles. The government is offering a 2% charge on vehicles under $100,000 and 4% on those above. This is compared to regular vehicles, which have transfer duty rates of between 6% and 8%.

Learn more

Should you have any questions regarding electric vehicle concessions, please contact Kristy Baxter or Angela Stavropoulos from Pilot’s medical services division on taxmed@pilotpartners.com.au or (07) 3023 1300.