Fringe benefit tax (FBT) applies when certain non-cash benefits are provided to employees or shareholder-employees. For example, if an employer provides an EV for an employee’s private use as a result of their employment, the employer is liable for FBT.
Inland Revenue has launched a public consultation on proposals to review the FBT regime. The issues paper focuses on simplifying the rules and reducing compliance costs, with particular attention on how FBT applies to employer-provided motor vehicles.
The paper proposes new rates for calculating the value of a vehicle for FBT purposes (based the vehicle’s cost price):
- Standard vehicle default rate: 26% annually or 6.5% quarterly
- Hybrid vehicle: 22.4% annually or 5.6% quarterly
- Electric vehicle (EV): 19.4% annually or 4.8% quarterly
Drive Electric’s Submission
We believe there should be a larger gap in FBT rates between internal combustion engine vehicles (ICEs) and EVs.
In our submission, we recommend:
- Lowering FBT on EVs to 15%
- Maintaining FBT on ICEs at 26%
- Explicity exempting employer-provided smart AC 7kWh chargers from FBT
Download the full Drive Electric submission to the Inland Revenue Department.
Drive Electric regularly meets with and advises key political figures and decision-makers in the transport sector, submits advisory papers on e-mobility legislation, and contributes to government-led policy development groups — helping to shape Aotearoa’s transition to cleaner, smarter transport. Become a member, stay connected and be part of the journey.
