FBT on Plug-In Hybrid Electric Vehicles

Posted at 16:52h in Business, News, Tax by Simmons Livingstone

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Starting April 1, 2025, plug-in hybrid electric vehicles (PHEVs) will no longer qualify as zero or low-emissions vehicles under Fringe Benefits Tax (FBT) law. This change means PHEVs will become ineligible for the electric car FBT exemption, impacting employers who provide these vehicles for private use.

Employers can continue to apply the FBT exemption for PHEVs in specific circumstances as outlined below.

Pre-existing exemption – if the PHEV was already exempt from FBT before April 1, 2025
Binding financial commitment – a financially binding commitment must be in place to continue providing the vehicle for private use on and after April 1, 2025. Optional extensions such as a lease extension are not considered binding commitments

These updates are part of the government’s broader initiative to encourage fully electric vehicles. To learn more about how this shift aligns with the Electric Car Discount Bill and its implications for other electric vehicle exemptions, check our our article Eletric Vehicles: FBT Exemption Update.

For tailored advice on how these changes impact your business, please contact Simmons Livingstone on 1800 618 800 or via email at admin@simmonslivingstone.com.au.