The Government has introduced legislation into Parliament to implement an electric car discount. 

The discount will involve:

• Exemption from Fringe benefits tax (FBT) – a 47% tax on electric cars that are provided by the employer for private use

• Import tariffs – a 5% tax on some imported electric cars

A car benefit is an exempt benefit for a year of tax if: 

• the car is a zero or low emissions vehicle

• the value of the car at the first retail sale was below the luxury car tax threshold for fuel efficient vehicles (2022-23 threshold is $84,916), and

• the car is first held and used on or after 1 July 2022.

Zero or low emissions vehicles are cars that are:

• battery electric vehicles;

• hydrogen fuel cell electric vehicles; and

• plug-in hybrid electric vehicles.

The new exemption will only apply to electric cars that are first held and used on or after 1 July 2022.

The exemption will not apply to hybrid electric vehicles that are not plug-in.

It will not apply to electric cars that employers have provided to employees for their use before 1 July 2022. This measure is yet to enter the Senate and is not yet law, however, will be retrospective when passed.