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Kenbo(Initiate)Initiate
20 May 2026

Just want to confirm that I am treating this situation right, tax-wise. I have a business that I run through a trust structure, of which I'm a director of the corporate trustee. The business is about to buy an EV under the luxury car threshold and provide the car as a fringe benefit for use by the directors for their personal use. From reading past forum posts(https://community.ato.gov.au/s/question/a0JRF000000p6Y1/p00276654, https://community.ato.gov.au/s/question/a0J9s000000QQpu/p00217104, https://community.ato.gov.au/s/question/a0J9s000000S4RE/p00232002), and just want to make sure that the tax advice is still current, I believe the correct tax treatment of the various components are:


- GST, business is able to claim 100% of the GST credits for the cost of the car(up to the car limit) as from the business's perspective, the "business use" of the car is 100% as cars provided as fringe benefit cars are deemed 100% business use because private use of such fringe benefit cars are subject to FBT


- Depreciation, business is able to claim depreciation on the car(up to car limit as well) because similar to GST determination above, the "business use" of the fringe benefit car is 100%


- interest on chattel mortgage, if purchasing the EV using a chattel mortgage, interest on the business loan is tax-deductible to the business as it is being used to purchase a fringe benefit car for use by the business


- FBT, as company-provided EV cars under the LCT are currently FBT-exempt, there is no need to pay any additional FBT however, still need to work out the taxable value of the car benefit provided and report as reportable fringe benefits amount if over $2000 in an FBT year. If the EV is provided as a pooled car(ie. available for any of the directors/employees to use), then there is no need to report FBT at all.

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87 views
2 replies

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Most helpful reply

PollyATO(Community Support)Community Support
24 May 2026

Hi @Kenbo,


You've got the right understanding of how the tax treatment works for an EV provided as a fringe benefit. Let me confirm each part for you.


For GST, you can claim 100% of the GST credits on the car purchase up to the car limit. This is because a car provided as a fringe benefit is treated as 100% business use for GST purposes.


For depreciation, you can claim the full depreciation on the car up to the car limit. The same 100% business use principle applies here.


For interest on a chattel mortgage, the interest is tax deductible to the business. The loan is being used to purchase an asset that's used for business purposes, including providing fringe benefits to employees.


For FBT, you're correct that eligible electric cars under the luxury car tax threshold are currently exempt from FBT. However, you still need to work out the taxable value of the car benefit and report it as a reportable fringe benefit amount if it's over $2,000 in an FBT year. If the EV is provided as a pooled car available for use by any employee and meets the pooled car conditions, then there's no need to report FBT.


The key thing to remember is that even though the benefit is exempt from FBT, it's still reportable on the employee's income statement if the taxable value exceeds $2,000.


Check out the information on how FBT applies to cars and the electric cars exemption on our website to make sure you're meeting all your obligations for working out the taxable value and reporting requirements.

All replies

Most helpful reply

PollyATO(Community Support)Community Support
24 May 2026

Hi @Kenbo,


You've got the right understanding of how the tax treatment works for an EV provided as a fringe benefit. Let me confirm each part for you.


For GST, you can claim 100% of the GST credits on the car purchase up to the car limit. This is because a car provided as a fringe benefit is treated as 100% business use for GST purposes.


For depreciation, you can claim the full depreciation on the car up to the car limit. The same 100% business use principle applies here.


For interest on a chattel mortgage, the interest is tax deductible to the business. The loan is being used to purchase an asset that's used for business purposes, including providing fringe benefits to employees.


For FBT, you're correct that eligible electric cars under the luxury car tax threshold are currently exempt from FBT. However, you still need to work out the taxable value of the car benefit and report it as a reportable fringe benefit amount if it's over $2,000 in an FBT year. If the EV is provided as a pooled car available for use by any employee and meets the pooled car conditions, then there's no need to report FBT.


The key thing to remember is that even though the benefit is exempt from FBT, it's still reportable on the employee's income statement if the taxable value exceeds $2,000.


Check out the information on how FBT applies to cars and the electric cars exemption on our website to make sure you're meeting all your obligations for working out the taxable value and reporting requirements.

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Director's company EV car, claiming GST credits, depreciation, interest- what are the FBT implications? | ATO Community