Australia: Full fringe benefit tax exemption for EVs to be phased out and replaced with permanent 25% discount from 2029 onwards
Existing leases will not be impacted by the changes.
The federal government announced that it will be phasing out the full fringe benefits tax (FBT) exemption for electric vehicles (EVs) and replacing it with a permanent 25% discount over the next three years.
Changes to the FBT for EVs will be brought in progressively through three phases:
- First phase (until March 31, 2027): Existing EV FBT discount will continue in full.
- Second phase (between April 1, 2027, and April 1, 2029): Full FBT discount will continue to apply only for EVs costing $75,000 or less. During this phase, EVs costing more than $75,000* but below the luxury car tax threshold will receive a 25% discount on their payable FBT.
- Third phase (from April 1, 2029, onwards): All EVs below the luxury car tax threshold will receive the 25% discount on payable FBT.
Existing leases will not be impacted by the changes, and eligible EVs will continue to be exempt from import tariffs on an ongoing basis.
*$ = Australian dollar