E-scooters and e-skateboards – FBT exempt?

We have previously published articles on whether the provision of e-bikes to employees by way of novated lease arrangements can be undertaken on an FBT-exempt basis.

The ATO view is that an e-bike is a motor powered road vehicle (but not a car) and so providing an e-bike to staff via a novated lease arrangement is a residual benefit that will qualify for FBT exemption under subsection 47(6) where the only private travel undertaken is:

• travel to and from work
• use that is incidental to travel in the course of performing employment-related duties, and
• non-work-related use that is minor, infrequent and irregular.

With their growing popularity, the question now arising is whether the same FBT outcome occurs where an e-scooter or e-skateboard is provided by way of novated lease arrangement to an employee.

This question was recently put to the ATO by way of private binding ruling request and the ATO’s response can be summarised as follows:

• e-scooters and e-skateboards are not motorcycles and are therefore not excluded from the definition of ‘car’ for FBT purposes
• both e-scooters and e-skateboards are designed to transport single passengers, primarily as recreational devices. Their main function is not considered to be related to public road use. Whilst it may be possible to travel on a road on one of these devices, this would be secondary to the main function (this is notwithstanding whether travelling on a road is prohibited under the relevant road rules of a particular state or territory)
• pursuant to the previous point, e-scooters and e-skateboards are therefore not cars for FBT purposes as they are not a motor powered road vehicle
• the provision of e-scooters and e-skateboards by way of novated lease results in a residual fringe benefit arising
• to qualify for the exemption in subsection 47(6) the residual benefit that is provided must be a motor vehicle. In this case, the residual benefit that arises from an employee’s use of an e-scooter or e-skateboard will not be an exempt benefit under subsection 47(6) as neither an e-scooter or an e-skateboard are considered to be a motor vehicle.

The edited version of private ruling issued by the ATO can be viewed at 1051935519204

We note that a private ruling is not a public binding ruling, nevertheless, the views expressed within private rulings do provide guidance on the ATO’s preferred view and so acting in a contrary manner to one does come with risk.

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