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On behalf of The Tax Institute, thank you for the opportunity to provide feedback to the Treasury regarding its consultation on the sustainable fringe benefits tax treatment of electric cars.
The consultation released on 11 September 2026 comprises:
- Draft Treasury Laws Amendment Bill 2026: Phased changes to the FBT electric car exemption (the draft Bill); and
- accompanying draft explanatory materials (the draft EM).
Please find below our brief comments on the draft Bill and the draft EM. Our comments take into account the views of our National FBT and Employment Taxes Technical Committee and our broader membership.
- We acknowledge the ATO’s objective of recalibrating the fringe benefits tax (FBT) exemption to the maturing electric car market as the availability of affordable electric cars increases.
- In its current form, the draft Bill proposes to continue to apply the FBT exemption under Section 8A of the Fringe Benefits Tax Assessment Act 1986 (Cth) for electric cars until the commitment to provide that car ceases. Under the draft Bill, a commitment may cease because a new commitment is made in relation to the same car. Our concern arises where there are changes in employer that are outside the control of the employee, for example:
- asset sales of businesses; and
- government changes for government employees.
- Under the draft legislation, a new commitment will be made in relation to the same car, and the FBT exemption will be lost early. We consider that this does not seem appropriate and suggest that the FBT exemption is maintained until the end of the lease in these circumstances.
We would welcome the opportunity to engage further with the ATO on this issue, including through consultation or roundtable discussions, to support the development of clear, practical and principled guidance in this area. If you would like to discuss the above, please contact our Tax Counsel, John Storey (copied), on (03) 9603 2003.
The Tax Institute is the leading forum for the tax community in Australia. We are committed to shaping the future of the tax profession and the continuous improvement of the tax system for the benefit of all. In this regard, The Tax Institute seeks to influence tax and revenue policy at the highest level with a view to achieving a better Australian tax system for all.