At Positive Salary Packaging , we understand the importance of being environmentally conscious and we are dedicated to supporting our novated leasing customers in their efforts to reduce their carbon footprint and make changes to their own actions for the benefit of others as well.
As the popularity of electric vehicles (EVs) rises at an increasing pace, we are proud to offer our customers the opportunity to choose a more sustainable, eco-friendly EV option for their novated lease.
In December 2022, the Federal Government passed the Treasury Laws Amendment (Electric Car Discount) Bill 2022, which includes an exemption from paying Fringe Benefits Tax (FBT) on eligible EVs. This legislation aims to increase the adoption of EVs and encourage car manufacturers to supply more affordable electric models in Australia.
The EV legislation in more details
The discount applies to fringe benefits provided on or after 1 July 2022 for eligible zero or low emission vehicles that are held and used on or after 1 July 2022. This includes an exemption to pay FBT on EV and PHEV vehicles that are below the luxury car tax threshold of $84,916 for low-emission vehicles.
Eligible vehicles include battery electric vehicles and hydrogen fuel cell electric vehicles, provided the vehicle is first held and used from 1 July 2022. PHEV’s are also eligible until 1 April 2025. From that date forward, those on pre-existing leases will still be entitled to the exemption until the end of their lease, as long as a commitment is made before 1 April 2025 and there is not a change in circumstances
It’s important to note that the FBT exemption only applies to the personal use of electric cars operated by businesses or financed through a novated lease. This means that a novated lease on an EV differs from a fuel-powered vehicle, as there are no post-tax deductions, otherwise known as an ECM.
The FBT exemption could make a $50,000 model up to $4,700* a year cheaper under a salary sacrifice arrangement. The potential FBT savings could be even higher for more expensive EV models – up to the $84,916 luxury car tax threshold for fuel-efficient vehicles – and could further complement the benefits of novated leasing. Additionally, electric cars may be cheaper to run and maintain, making them even more appealing to potential drivers.
Leading the Way in EV-Novated Leasing
At Positive we are one of Australia’s most experienced novated leasing providers and commercial finance providers , serving thousands of employees from organisations across various sectors and locations. Our focus on the future means that we are the first novated leasing company to have an EV-ready charge card for supercharging in the industry. We have a deep understanding of novated leasing and the benefits it can offer, particularly in relation to eco-friendly vehicles.
We are committed to being a leading provider in supporting employees transition to EV and PHEV’s in Australia. We are excited to continue supporting our customers in their journey towards a greener and more sustainable future.
* Source TREASURY LAWS AMENDMENT (ELECTRIC CAR DISCOUNT) BILL 2022
Ready to find out how much tax you can save?