With a change of Government comes new policies and the scrapping of policies previously announced under the former Government (which may include pending legislation lapsing in Parliament).
In this article we have identified a few key tax areas in which the change of Government may affect issues previously covered for TaxEd members.
FBT Exemption for Electric Vehicles
Prior to the election the Australian Labor Party announced that it would exempt certain electric vehicles from FBT where provided through work for private use.
Currently there is little detail on the measure. Further discussion can be found in our May 2022 article.
Below is an extract from the announcement entitled ‘Labor’s Electric Car Discount‘:
“As part of the Discount, Labor will exempt many electric cars from:
- Import tariffs – a 5 per cent tax on some imported electric cars; and
- Fringe benefits tax – a 47 per cent tax on electric cars that are provided through work for private use.
These exemptions will be available to all electric cars below the luxury car tax threshold for fuel efficient vehicles ($77,565 in 2020-21).
…
Labor’s Electric Car Discount will begin on 1 July 2022 and be reviewed after three years, in light of electric car take up at that time”.
We certainly look forward to some more details as the prospect of salary sacrificing an electric vehicle on an FBT exempt basis (regardless of private use) has many people excited. Based on the announcement the exemption is meant to take effect on 1 July 2022 and run at least for 3 years prior to review.
The question is, will the fleshed out final policy be as generous as the announcement suggest?
FBT & the definition of ‘Commercial Parking Station’ – what does the future now hold?
On 29 March 2022 the former Assistant Treasurer Michael Sukkar announced (link) that the Morrison Government would undertake a consultation with a view to clarifying the definition of “commercial parking station”. The clarification was intended to better reflect the policy intention and long held ATO view (expressed in now repealed TR 96/26) as to when a car parking fringe benefits arise and more specifically what is a commercial car parking station.
The announcement indicated any change to the ATO view expressed TR 2021/2 would apply to benefits provided from 1 April 2022 .
It is presently uncertain whether the Albanese Government will continue with the review and is also committed to restoring the historical interpretation of ‘commercial parking station’.
To refresh your memory on exactly what all the fuss is about take a look at our April 2022 TaxEd Update article.
In the meantime employers should prepare themselves as if TR 2021/2 will apply to the 2021/22 FBT year but hope the Albanese Government delivers on the former Government’s announcement.
Not-for-profit Legislative Definition
When previously in power the Labor government introduced a bill that would have resulted in the the term “not-for-profit” having a standardised definition throughout tax legislation. Although the Bill lapsed in 2012, with the change of Government we may a similar measure reintroduced at some point.
DGR Category: Pastoral Care
The Morrison Government previously announced that a new deductible gift recipient (DGR) category for pastoral care would be established.
The Morrison Government had recently sought consultation on the proposed design of the new DGR category and its administration.
It is uncertain whether the Albanese Government will continue with the establishment of the new DGR category.
Once the Albanese Government has ‘settled-in’ we expect that there will be more clarity on the above measures and we will update our TaxEd members as and when things develop.