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The Fringe Benefits Tax (FBT) exemption introduced in mid-2022 has significantly reduced the cost of electric vehicles (EVs) for many Australians. This initiative by the Australian Government allows salaried employees to enter into a novated lease arrangement and pay for an EV entirely from their pre-tax income, effectively removing the usual FBT liability. This exemption has been widely regarded as transformative, helping to close the price gap between EVs and traditional vehicles. However, understanding the structure and ongoing compliance requirements is essential to fully benefit from the scheme.
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