How to eliminate FBT on your company car Posted on January 13, 2023
How to eliminate FBT on your company car?
Are you sick of paying as much as $9,000 fringe benefits tax (FBT) on your company car each year? There is a solution. The Government is exempting FBT on all electric cars and plug in hybrids, purchased after 1st July 2022. The purchase price must be less than $84,916. The incentive stems from the Government’s low emissions policy and is a clear message that the government is serious about electric cars dominating the Australian highways. Company directors who have cars with minimal work-related use, pay approximately 20% of the purchase price of the vehicle in FBT. This can range between $9,000 – $12,000 in tax on the average company car. This incentive completely removes any FBT liability and is a significant saving for those who take the step to a low emission vehicle.
The opportunity is also available for employees wishing to salary sacrifice their next electric car purchase through a novated lease arrangement.
In addition, there is a one-off NSW government rebate of $3,000 available for electric cars or plug in hybrids acquired for less than $68,750.
Electric cars may not be for everyone, but if you are looking to reduce the amount of FBT you pay on your company car, then electric cars are worth considering.
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