Why you should buy your electric car through your company

Many drivers are looking to make the switch to an electric car, whether it’s an EV (electric vehicle), BEV (battery electric vehicle) or ZEV (zero-emission vehicle) with the cost of fuel adding to the demand.

Prices for new electric cars remain high, but state and territory governments are investing in charging infrastructures and are keen to incentivise people to go electric by offering a number of rebates and tax exemptions.

Fringe Benefit Tax

Fringe Benefit Tax (FBT) rules changed from 1 July 2022 employers do not pay FBT on eligible electric cars and associated car expenses.

Am I eligible?

You do not pay FBT if you provide private use of an electric car that meets all the following conditions:

Benefits provided under a salary packaging arrangement are included in the exemption.

Associated car expenses

The following car expenses are exempt from FBT if they are provided for an eligible electric car:

You may be able to reduce the FBT on any items that aren’t exempt car expenses, if the expenditure would have been deductible to the employee had they incurred it themselves.

Home charging station

A home charging station is not a car expense associated with providing a car fringe benefit for electric cars. However, it may be a property fringe benefit or an expense payment fringe benefit.

Goods and Services Tax

Goods and services tax (GST) is a tax of 10% on most goods, services and other items sold or consumed in Australia. Companies can also claim the 10% (GST) back if GST registered when purchasing an electric car.

Rebates

There are also state rebates available: -

Our services

TaxAssist Accountants can help with all financial aspects of running your business from Year End Accounts, Tax Returns, Bookkeeping, BAS Returns, and Payroll, as well as Cashflow Projections, Superannuation, Business Plans, Employment Law, Debt Recovery, Capital Gains Tax, Audits and more.

Give us a call on 02 9608 3707 or fill in our enquiry form and we can set up a free initial consultation.

Last updated: 4th March 2023