FBT on plug-in hybrid electric vehicles

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Changes to FBT Exemptions for Plug-In Hybrid Vehicles Starting April 2025

Employers must have binding agreements in place to retain FBT exemptions for PHEVs, with new restrictions on eligibility for electric car exemptions.

From 1 April 2025, a plug-in hybrid electric vehicle (‘PHEV’) will not be considered a zero or low emissions vehicle under fringe benefits tax (‘FBT’) law and will not be eligible for the electric car FBT exemption.  However, an employer can continue to apply the electric car exemption if: 

  • use of the PHEV was exempt from FBT before 1 April 2025; and 
  • they have a financially binding commitment to continue providing private use of the vehicle to an employee or their associate on and after 1 April 2025 (note that any optional extension of the agreement is not considered binding). 

If there is a change to a pre-existing commitment on or after 1 April 2025, the FBT exemption for the PHEV will no longer apply from the date of that new commitment. 

An employer is not entitled to an exemption from FBT after 1 April 2025 if there was no binding financial commitment to provide the car to a particular employee in place before then. 

Make Sure You Understand Your Fringe Benefit Tax (FBT) Obligations. Call Omnis Business Accountants in West Perth on 08 9380 3555 — let us manage and minimise your Fringe Benefit Tax (FBT) obligations!