EV Tax Benefits due to the FBT exemption and the NSW Govt $3,000 rebate

Below is an example calculation of the tax savings for a profitable trading company that can result from the NSW Govt $3,000 rebate and the new labour govt FBT exemption for EVs provided to employees.  

The key benefit is that the annual employee contribution/payment to the company we raise to eliminate the 47% FBT bill is not required as the private use of the EV is exempt from FBT, so annual tax savings apply. (ignoring the fuel savings)  If the employer is paying FBT on the vehicle, the FBT tax saving is approx $12,500.

‍FBT exemption for EVs from 1 July 2022

If your employer provides you with the use of a car that is classified as a zero or low emissions vehicle there is an FBT exemption that can potentially apply to the employer from 1 July 2022, regardless of whether the benefit is provided in connection with a salary sacrifice arrangement or not. The FBT exemption should normally apply where:
• The value of the car is below the luxury car tax threshold for fuel efficient vehicles ($84,916 for 2022-23) when it was first purchased. If you buy an EV second-hand, the FBT exemption will not apply if the original sales price was above the relevant luxury car tax limit; (Note the Car Limit of $64,741 still caps the GST and tax depreciation claims) and
• The car is both first held and used on or after 1 July 2022.
The exemption also includes associated running costs.  

RFBA is reported on STP
While the FBT exemption on EVs applies to employers, the value of the fringe benefit is still taken into account when working out the reportable fringe benefits of the employee. That is, the value of the benefit is reported on the employee’s income statement. While you don’t pay income tax on reportable fringe benefits, it is used to determine your adjusted taxable income for a range of areas such as the Medicare levy surcharge, private health insurance rebate, employee share scheme reduction, and certain social security payments.

Who the FBT exemption does not apply to
By its nature, the FBT exemption only applies where an employer provides a car to an employee. Partners of a partnership and sole traders are not employees and cannot access the exemption personally.
If you are a beneficiary of a trust or shareholder of a company, the exemption can only apply if the benefit is provided in your capacity as an employee or as a director of the entity (you need to be able to show you have an active role in the running of the entity).