2022

The Parliament of the

Commonwealth of Australia

HOUSE OF REPRESENTATIVES

Presented and read a first time

Treasury Laws Amendment (Electric Car Discount) Bill 2022

No.      , 2022

(Treasury)

A Bill for an Act to amend the Fringe Benefits Tax Assessment Act 1986 to exempt benefits relating to cars that are zero or low emissions vehicles, and for other purposes

Contents

1............ Short title............................................................................................. 1

2............ Commencement................................................................................... 1

3............ Schedules............................................................................................ 2

Schedule 1—Electric car discount: exemptions from fringe benefits tax 3

Fringe Benefits Tax Assessment Act 1986                                                               3

A Bill for an Act to amend the Fringe Benefits Tax Assessment Act 1986 to exempt benefits relating to cars that are zero or low emissions vehicles, and for other purposes

The Parliament of Australia enacts:

1  Short title

                   This Act is the Treasury Laws Amendment (Electric Car Discount) Act 2022.

2  Commencement

             (1)  Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Note:          This table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

             (2)  Any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

3  Schedules

                   Legislation that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

Schedule 1—Electric car discount: exemptions from fringe benefits tax

Fringe Benefits Tax Assessment Act 1986

1  At the end of Subdivision A of Division 2 of Part III

Add:

8A  Exempt car benefits: cars that are zero or low emissions vehicles

             (1)  A car benefit is an exempt benefit in relation to a year of tax if:

                     (a)  the benefit is provided in the year of tax in respect of the employment of a current employee; and

                     (b)  the car is a zero or low emissions vehicle when the benefit is provided; and

                     (c)  no amount of luxury car tax (within the meaning of the A New Tax System (Luxury Car Tax) Act 1999) has become payable on a supply (within the meaning of that Act) or importation (within the meaning of that Act) of the car before the benefit is provided.

             (2)  A zero or low emissions vehicle is:

                     (a)  a battery electric vehicle; or

                     (b)  a hydrogen fuel cell electric vehicle; or

                     (c)  a plug‑in hybrid electric vehicle.

             (3)  A battery electric vehicle is a motor vehicle that:

                     (a)  uses only an electric motor for propulsion; and

                     (b)  is fitted with neither a fuel cell nor an internal combustion engine.

             (4)  A hydrogen fuel cell electric vehicle is a motor vehicle that:

                     (a)  uses an electric motor for propulsion; and

                     (b)  is equipped with a fuel cell for converting hydrogen to electricity; and

                     (c)  is not fitted with an internal combustion engine.

             (5)  A plug‑in hybrid electric vehicle is a motor vehicle that:

                     (a)  uses an electric motor for propulsion; and

                     (b)  takes and stores energy from an external source of electricity; and

                     (c)  is fitted with an internal combustion engine for either or both of the following:

                              (i)  the generation of electrical energy;

                             (ii)  propulsion of the vehicle.

2  Subsection 53(1)

After “subsection 8(2)” insert “or section 8A”.

3  At the end of section 135P

Add:

Exempt car benefits for zero or low emissions vehicles are included

             (3)  In working out the employee’s individual fringe benefits amount for the purposes of this section, disregard section 8A (Exempt car benefits: zero or low emissions vehicles).

4  Paragraph 135Q(1)(c)

Omit “apart from those sections,”, substitute “apart from those sections and section 8A,”.

5  Subsection 135Q(1) (at the end of the note)

Add “Section 8A exempts car benefits for zero or low emissions vehicles.”.

6  Subsection 136(1)

Insert:

battery electric vehicle has the meaning given by subsection 8A(3).

hydrogen fuel cell electric vehicle has the meaning given by subsection 8A(4).

plug‑in hybrid electric vehicle has the meaning given by subsection 8A(5).

zero or low emissions vehicle has the meaning given by subsection 8A(2).

7  Application of amendments

(1)       The amendments of the Fringe Benefits Tax Assessment Act 1986 made by this Schedule apply to benefits provided on or after 1 July 2022.

(2)       Section 8A of the Fringe Benefits Tax Assessment Act 1986 applies to a car benefit only if the earliest time when a person both held and used the car was at or after the start of 1 July 2022.