The Australian Taxation Office (ATO) has introduced key changes to Fringe Benefits Tax (FBT) exemptions for electric vehicles (EVs) in 2025, impacting businesses and employees who benefit from employer-provided EVs. Understanding these updates is crucial for businesses looking to manage tax obligations effectively while leveraging EV incentives.
Changes to Electric Vehicle Exemptions
The FBT exemption for eligible EVs has been a significant incentive for businesses adopting sustainable vehicle options. However, in 2025, modifications to eligibility criteria and compliance requirements mean businesses must reassess their current fleet policies.
Key Updates:
- Revised Eligibility Criteria: Some EV models may no longer qualify for FBT exemptions due to updated pricing thresholds and specifications.
- Luxury Car Tax Considerations: Vehicles exceeding the defined luxury car tax (LCT) threshold may now attract FBT, increasing costs for businesses.
- Reporting and Compliance: Employers will need to ensure accurate reporting to align with ATO requirements, including proper valuation and documentation of exempt benefits.
ATO Announcements and FBT Deadlines
The ATO has also released important deadlines for FBT returns and payments for the 2024–25 financial year:
- FBT Year-End Date: 31 March 2025 – Businesses should ensure they have accurate records of fringe benefits provided during the financial year.
- FBT Return Due Date: 21 May 2025 (for self-lodged returns).
- FBT Payment Deadline: 28 May 2025 (for payments associated with lodged returns).
- Lodgment via Tax Agent: If using a registered tax agent, businesses may have extended deadlines, but it is essential to confirm individual lodgment dates.
How These Changes Affect Businesses
For businesses that provide EVs to employees, these updates may impact financial planning and fleet management strategies. Employers must:
- Review existing EV benefits to determine continued eligibility for exemptions.
- Assess the cost implications of non-exempt vehicles.
- Stay updated with ATO guidelines to ensure compliance and avoid unexpected tax liabilities.
With these changes, businesses should work closely with their accountants to evaluate the tax impact and explore alternative solutions. Lowrys Accountants can help navigate these FBT updates, ensuring compliance while maximising tax efficiency.
For tailored advice on managing your FBT obligations and meeting ATO deadlines, contact Lowrys Accountants today.