{"id":4679,"date":"2023-04-19T14:40:00","date_gmt":"2023-04-19T04:40:00","guid":{"rendered":"https:\/\/charmanpartners.com.au\/?p=4679"},"modified":"2023-04-19T15:46:20","modified_gmt":"2023-04-19T05:46:20","slug":"tax-concessions-for-electric-fuel-efficient-vehicles","status":"publish","type":"post","link":"https:\/\/charmanpartners.com.au\/tax-concessions-for-electric-fuel-efficient-vehicles\/","title":{"rendered":"Tax Concessions for Electric & Fuel Efficient Vehicles"},"content":{"rendered":"

Tax Concessions for Electric & Fuel Efficient Vehicles<\/strong>The Government launched its first ever electric vehicle strategy in September 2022 to encourage the adoption of electric vehicles in Australia. Their focus includes improving the charging network by allocating federal EV infrastructure funding, goals for net-zero and CO2 reduction levels, contained a pledge to have 75% of the Government fleet made up of battery EV\u2019s by 2025, and provided a funding package to support small businesses with electrification of fleets.<\/p>\n

So what support is on offer for small business?<\/p>\n

The Government recognises that fuel efficient cars have a higher purchase price, creating a bigger outlay for businesses and a higher value to attribute to Fringe Benefits Tax when driven by employees.<\/p>\n

From 1st<\/sup> July 2022 when purchasing a car the Luxury Car Tax threshold for fuel-efficient cars has been raised to $84,916 vs. $71,849 for standard vehicles. The excess of a car\u2019s value (inclusive of GST) above these thresholds is taxed at 33% for sales of cars 2 years old & less. This enables a bigger range of fuel-efficient vehicles (fuel consumption not exceeding 7 litres per 100 km) to be available to buyers before the LCT is applicable. The application of the higher threshold equates to a saving of $4,312 in LCT.<\/p>\n

Removal of Import Tariffs \u2013 A Bill was passed in November 2022 to remove the 5% import tariff, dropping the purchase price for buyers. This applies to purchases from 1st<\/sup> July 2022 of EV\u2019s under the luxury car threshold of $84,916. It applies to battery electric, hydrogen fuel cell & hybrid cars that can be charged by plug-in to an external power source.<\/p>\n

FBT electric cars exemption \u2013 An exemption from Fringe Benefits Tax applies to electric cars purchased after 1st<\/sup> July 2022 that have not had Luxury Car Tax applied (ie were under the threshold, currently $84,916), and are a zero or low emissions car used by an employee. This includes benefits under a salary packaging arrangement. A zero or low emissions car is a battery electric, hydrogen fuel cell electric or plug-in hybrid electric car. Note motorcycles & scooters are not cars for FBT purposes and will not qualify for the exemption.<\/p>\n

At a state level the Victorian Government have made Zero & Low Emission Vehicles eligible for a Vicroads registration discount of up to $100 per year. There is also a $3,000 subsidy for the first 20,000 battery electric vehicles (BEVs) or fuel cell electric vehicles (FCEVs) sold that are priced under $68,740 (RRP plus delivery charge and optional extras) through participating dealers.<\/p>\n

Conversely, the Victorian Government now charges a Zero and Low Emission Vehicle (ZLEV) road-user charge based on the number of kilometres travelled for the year. Australian drivers pay a Commonwealth fuel excise when purchasing petrol, LPG and diesel which funds the development & maintenance of Australian roads. As ZLEV\u00a0 drivers don\u2019t pay the fuel excise this charge is a way to ensure all road users pay their fair share. The ZLEV charge applicable from 1st<\/sup> July 2022 is 2.6 cents per kilometre travelled during the year for electric vehicles and 2.1 cents per kilometre for hydrogen or plug-in electric hybrids. To put this in perspective, an electric vehicle travelling 12,000 km for the year would pay just $312 as a ZLEV charge, a significant difference to the contribution by petrol users.<\/p>\n

So with government commitment to the above incentives, as well as backing improved charging infrastructure, businesses should certainly consider these factors when purchasing their next vehicle.<\/p>\n

\"\"<\/a><\/p>\n

Contributed by Kyra Gonsal.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Tax Concessions for Electric & Fuel Efficient VehiclesThe Government launched its first ever electric vehicle strategy in September 2022 to encourage the adoption of electric vehicles in Australia. 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