Treasury Laws Amendment (Electric Car Discount) Bill 2022 – Bill providing FBT exemption for electric vehicles introduced
A Bill providing an FBT exemption for zero or low emissions vehicles has been introduced into Federal Parliament. To qualify for the exemption:
- the value of the car at first retail sale must be below the luxury car tax threshold for fuel efficient cars ($84,916 for 2022-23);
- the car (as defined in the FBT Act) must be a battery electric vehicle, a hydrogen fuel cell electric vehicle, or a plug-in hybrid electric vehicle; and
- the car must be first held and used on or after 1 July 2022 (noting that cars ordered prior to 1 July 2022 will still be eligible so long as they were delivered on or after that date).
- the exemption will be available even if the car fringe benefit is provided under a salary packaging arrangement;
- the value of the exempt benefit will still be counted for the purposes of determining an employee’s reportable fringe benefit amount; and
- the Bill has been referred to the Senate Economics Legislation Committee, which is due to provide its report by 21 September 2022.
Treasury Laws Amendment (2022 Measures No 1) Bill 2022 – Miscellaneous tax and super measures re-introduced
The Federal Government has tabled a Bill reintroducing a range of tax and superannuation law amendments which were previously contained in Bills that have now lapsed. These include:
- ensuring that certain recovery grants paid to small businesses and primary producers in connection with Cyclone Seroja will not be taxable in the 2021-22 and later income years;
- providing income and withholding tax exemptions to FIFA and its wholly owned subsidiary FWWC2023 Pty Ltd for activities associated with the 2023 FIFA Women’s World Cup, which will apply from 1 July 2020 to 31 December 2028;
- minor and technical amendments to Treasury portfolio legislation, including retrospective amendments to the Fringe Benefits Tax Assessment Act 1986 (Cth) applying to the 2017-18 and later FBT years to restore access to FBT exemptions for certain tax exempt not-for-profit societies and associations inadvertently excluded under amendments made by the Tax Laws Amendment (2013 Measures No 2) Act 2013 and prevent overlap between employees covered by the $30,000 exemption cap and the $17,000 exemption cap;
- delaying the commencement of the Modernising Business Registers program to 1 July 2026 or an earlier date specified by proclamation; and
- transitional provisions relating to the replacement of the Superannuation Complaints Tribunal with the Australian Financial Complaints Authority.
Proposed amendments to mitigate impact of Douglas case
The Albanese government has released exposure draft legislation designed to remove potential adverse tax consequences for Defence Force members receiving certain defined benefit superannuation pensions following the Full Federal Court’s decision in FCT v Douglas  FCAFC 220 (first covered in the Birchstone Brief for the week ended 11 December 2020). In that case, the Court held that invalidity pensions paid from the Defence Force Retirement and Death Benefits (DFRDB) and the Military Superannuation Benefits (MSB) Schemes commencing on or after 20 September 2007 were “superannuation lump sums” and not “superannuation income streams”.
The proposed amendments will:
- Introduce a non-refundable tax offset for veterans receiving an invalidity pension under the relevant Schemes (and eligible spouses and child beneficiaries after their death) to ensure they pay no more income tax or Medicare levy on their superannuation lump sum benefits than they would if they were treated as income stream benefits; and
- amend the definition of a ‘superannuation income stream’ to ensure that all other defined benefits pensions that commenced on or after 20 September 2007 will be taxed as superannuation income streams (as per the intended policy).
The amendments are proposed to apply retrospectively to income years commencing on or after 1 July 2007. The last day for comment on the exposure draft legislation is 5 August 2022.