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Tax man gives way to electric future


The Australian Tax Office has changed the ruling of vehicle business deductions from being based on cylinder capacity for internal combustion to include any motor vehicle, running on fossil fuel or electricity from a battery.

Previously, EVs were exempt because it didn’t contain an internal combustion engine, therefore meaning fleet vehicles such as Nissan LEAF, Tesla Model S or BMW i3 and i8. Now, all motor vehicles, electric or otherwise are valid for the 66 cents per kilometer tax deduction method for valid business use.

It’s believed the ruling will boost the economy of electric cars in Australia by enhancing their affordability considering their lack of required maintenance and the ability to charge of rooftop solar installations or plugging into the grid. Based on a one-third running cost comparison to petrol/diesel/LPG cars, claiming up to 66c per km up to 5000km equals an approximate $2200 saving annually for EV owners. The Energy Supply Association of Australia says maintenance costs of EVs over ICE (internal combustion engine) are 70% cheaper.

The ESAA has commissioned research that found small incentives from governments like dedicated lanes for EVs during peak times, dedicated parking spaces and accelerated introduction of models through dealers could increase Australia’s uptake of EVs to 4 million in the next 20 years. Australia currently sits equal 7th in the world for EV  government incentives with Netherlands and China. California leads.