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Improved employee benefits - EV

As an employer, providing benefits to your employees can be a great way to attract and retain talent. One such benefit could be offering electric cars to your employees. However, there have been some tax implications in the past that have made it less appealing for employers to do so.

But from 1 July 2022, the Australian government has introduced an exemption on Fringe Benefits Tax (FBT) for electric cars that meet certain criteria. This means that employers will no longer be required to pay FBT on electric cars provided to their employees if the car is a zero or low emissions vehicle, the first time it is used is on or after 1 July 2022, the car is used by a current employee or their associates, and luxury car tax has never been payable on the importation or sale of the car.

Furthermore, this exemption also applies to expenses related to the electric car such as registration, insurance, repairs, maintenance and fuel expenses, making it a much more attractive option for employers looking to provide benefits to their employees.

It is important to note, however, that despite the exemption on FBT, employers will still need to determine the taxable value of the benefits provided and include it in their employee's reportable fringe benefits amount (RFBA). This means that employers will still need to report the RFBA on their employee's income statement or payment summary.

As with any tax matter, it can be helpful to seek the advice of a registered tax agent or BAS agent. They can help navigate the complexities of FBT and ensure that employers are meeting their obligations while also making the most of the available exemptions and benefits.

Stellar Bookkeeping offers expert advice and assistance to businesses of all sizes. With their flexible operating model and personalised services, they can help employers determine their FBT obligations and make the most of the new exemption for electric cars. Contact Stellar Bookkeeping today to learn more about how they can help your business.


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