Product Ruling PR 2023/19
Date of effect: 1 April 2023

What this ruling is about: 1. This Ruling sets out the fringe benefits tax (FBT) consequences for an employer (Employer) of an employee (Employee) to whom Origin Energy Electricity Limited (Origin) provides an Electric Vehicle (EV) on a subscription basis under the terms and conditions of an Electric Vehicle Subscription Agreement (Subscription Agreement). 2. All legislative references in this Ruling are to the Fringe Benefits Tax Assessment Act 1986. Terms which are defined in the scheme documents referred to in paragraph 10 of this Ruling have been capitalised. 3. This Ruling does not address: Who this Ruling applies to 4. This Ruling applies to you if you, as the Employer, enter into the scheme described in paragraphs 10 to 18 of this Ruling on or after 1 April 2023 and on or before 31 March 2026. 5. This Ruling does not apply to you if you either: 6. This Ruling applies from 1 April 2023 to the Employers specified in paragraph 4 of this Ruling that enter into the scheme from 1 April 2023 until 31 March 2026. 7. However, the Ruling only applies and may be relied on to the extent that there is no change in the scheme or in the entity's involvement in the scheme. If the scheme carried out is materially different from the scheme described at paragraphs 10 to 18 of this Ruling, this Ruling cannot be relied upon and may be withdrawn or modified. 8. Subject to paragraph 3 of this Ruling and the assumptions in paragraph 9 of this Ruling: Assumptions 9. This Ruling is made on the basis of the following necessary assumptions: 10. The scheme is identified and described in the following: Note: Certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. 11. For the purposes of describing the scheme, there are no other agreements (whether formal or informal, and whether or not legally enforceable) which an Employer, or any associate of an Employer, will be a party to which are a part of the scheme. 12. All Australian Securities and Investments Commission requirements are, or will be, complied with for the term of the agreements. Overview of scheme 13. Origin holds a fleet of EVs (either owned by Origin or leased by Origin under long-term leases) which it is offering to the employees of Origin business customers (Employers) on a monthly subscription basis. 14. Employers that wish to subscribe for one or more EVs from Origin and (since 24 October 2024) are not classified as a 'small' employer by Origin, enter into the Master Agreement with Origin. From 24 October 2024, Employers that are classified as a 'small' employer by Origin are not required to enter into the Master Agreement with Origin. The Master Agreement is an overarching agreement whereby Origin agrees with the Employer to provide, at any time and from time to time during the term of the Master Agreement, an EV directly to an interested Employee on a subscription plan. 15. In order to give effect to the subscription of EVs: 16. The terms of the Subscription Agreement: 17. The Subscription Fee payable to Origin by the Employer covers the hire of the EV, registration, insurance, roadside assistance and servicing costs of the EV. 18. As contemplated by the Order Proposal, the Employer will enter into an effective salary sacrifice arrangement with the Employee under which the Employee's salary will be reduced by the amount of the GST-exclusive portion of the Subscription Fee the Employer is liable to pay Origin for the EV Subscription. Commissioner of Taxation 20 September 2023 Fringe benefits tax consequences in respect of provision of Electric Vehicle 19. Subsection 7(1) provides that where, in respect of the employment of an employee, a car held by a person (referred to as the 'provider'): then the application or availability of the car shall be taken to constitute a benefit provided by the provider to the employee in respect of the employment of the employee. 20. Paragraphs 162(1)(a) and (b) respectively provide that a car is held by a person when the car is owned by that person or leased to that person. Origin is a 'person' for FBT purposes. 21. As Origin will either be the person that owns the EV or the person to whom the EV is leased, Origin will hold the EV (and be the provider) for the purposes of section 7. 22. Where the EV under the Subscription Agreement is subscribed for by the Employer and applied to a private use by the Employee or (pursuant to subsections 7(2) or (3)) is taken to be available for the private use of the Employee, the application or availability of the EV under an arrangement between Origin as the provider and the Employer will constitute a car benefit provided by Origin to the Employee in respect of the Employee's employment pursuant to subsection 7(1). 23. However, that car benefit will be an exempt benefit in relation to a year of tax pursuant to subsection 8A(1) where: Further exemption of car expenses 24. Where the use of a car is exempted under section 8A, the exemption under subsection 53(1) extends to the provision of any car expense payment benefit, car property benefit and car residual benefit (defined in subsection 53(3)) provided in respect of that car during the same time as the exempted car benefit. 25. Therefore, any car expense payment benefit, car property benefit and car residual benefit provided to the Employee in relation to an EV subscribed for under the Subscription Agreement and attributable to a period during which a car benefit would have been provided to the Employee but for the application of section 8A to treat it as an exempt benefit, is also an exempt benefit in accordance with subsection 53(1). Calculating the taxable value of car fringe benefits 26. While the car benefit provided to the Employee under the circumstances referred to in subparagraph 8(a) of this Ruling will be exempt from FBT pursuant to section 8A, the application of section 8A is disregarded for the purposes of working out the Employee's reportable fringe benefits amount (if any) for a year of income in respect of their employment by the Employer (subsection 135P(3)). 27. Therefore, where the provision of the EV to the Employee constitutes a car fringe benefit, defined in subsection 136(1) to mean a fringe benefit that is a car benefit, the taxable value of that car fringe benefit will be calculated by the Employer using the statutory formula method in section 9, unless the Employer elects to use the operating cost method in section 10. 28. The statutory formula method applies a statutory rate to the base value of a car. Where the car is owned by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'cost price' of the EV to Origin (excluding registration and stamp duty), the cost of any fitted non-business accessories and dealer delivery charges (including GST). 29. Where the car is leased by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'leased car value' of the EV. Where the EV leased by Origin commences at or about the time the lessor under that lease purchased the EV (as assumed in subparagraph 9(d) of this Ruling), the 'leased car value' will be the cost price of the EV to the lessor (inclusive of GST). 30. The taxable value of a car fringe benefit calculated under the operating cost method is a percentage (representing the extent of the business use percentage applicable to the car) of the total costs of operating the car during the year. The operating costs of the EV determined under paragraph 10(3)(a) will include the Subscription Fees paid by the Employer to Origin and any other costs paid for by the Employer in relation to the operation of the Vehicle. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Class of entities or scheme: 13. Origin holds a fleet of EVs (either owned by Origin or leased by Origin under long-term leases) which it is offering to the employees of Origin business customers (Employers) on a monthly subscription basis. 14. Employers that wish to subscribe for one or more EVs from Origin and (since 24 October 2024) are not classified as a 'small' employer by Origin, enter into the Master Agreement with Origin. From 24 October 2024, Employers that are classified as a 'small' employer by Origin are not required to enter into the Master Agreement with Origin. The Master Agreement is an overarching agreement whereby Origin agrees with the Employer to provide, at any time and from time to time during the term of the Master Agreement, an EV directly to an interested Employee on a subscription plan. 15. In order to give effect to the subscription of EVs: 16. The terms of the Subscription Agreement: 17. The Subscription Fee payable to Origin by the Employer covers the hire of the EV, registration, insurance, roadside assistance and servicing costs of the EV. 18. As contemplated by the Order Proposal, the Employer will enter into an effective salary sacrifice arrangement with the Employee under which the Employee's salary will be reduced by the amount of the GST-exclusive portion of the Subscription Fee the Employer is liable to pay Origin for the EV Subscription. Commissioner of Taxation 20 September 2023 | Fringe benefits tax consequences in respect of provision of Electric Vehicle: 19. Subsection 7(1) provides that where, in respect of the employment of an employee, a car held by a person (referred to as the 'provider'): then the application or availability of the car shall be taken to constitute a benefit provided by the provider to the employee in respect of the employment of the employee. 20. Paragraphs 162(1)(a) and (b) respectively provide that a car is held by a person when the car is owned by that person or leased to that person. Origin is a 'person' for FBT purposes. 21. As Origin will either be the person that owns the EV or the person to whom the EV is leased, Origin will hold the EV (and be the provider) for the purposes of section 7. 22. Where the EV under the Subscription Agreement is subscribed for by the Employer and applied to a private use by the Employee or (pursuant to subsections 7(2) or (3)) is taken to be available for the private use of the Employee, the application or availability of the EV under an arrangement between Origin as the provider and the Employer will constitute a car benefit provided by Origin to the Employee in respect of the Employee's employment pursuant to subsection 7(1). 23. However, that car benefit will be an exempt benefit in relation to a year of tax pursuant to subsection 8A(1) where: | Further exemption of car expenses: 24. Where the use of a car is exempted under section 8A, the exemption under subsection 53(1) extends to the provision of any car expense payment benefit, car property benefit and car residual benefit (defined in subsection 53(3)) provided in respect of that car during the same time as the exempted car benefit. 25. Therefore, any car expense payment benefit, car property benefit and car residual benefit provided to the Employee in relation to an EV subscribed for under the Subscription Agreement and attributable to a period during which a car benefit would have been provided to the Employee but for the application of section 8A to treat it as an exempt benefit, is also an exempt benefit in accordance with subsection 53(1). | Calculating the taxable value of car fringe benefits: 26. While the car benefit provided to the Employee under the circumstances referred to in subparagraph 8(a) of this Ruling will be exempt from FBT pursuant to section 8A, the application of section 8A is disregarded for the purposes of working out the Employee's reportable fringe benefits amount (if any) for a year of income in respect of their employment by the Employer (subsection 135P(3)). 27. Therefore, where the provision of the EV to the Employee constitutes a car fringe benefit, defined in subsection 136(1) to mean a fringe benefit that is a car benefit, the taxable value of that car fringe benefit will be calculated by the Employer using the statutory formula method in section 9, unless the Employer elects to use the operating cost method in section 10. 28. The statutory formula method applies a statutory rate to the base value of a car. Where the car is owned by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'cost price' of the EV to Origin (excluding registration and stamp duty), the cost of any fitted non-business accessories and dealer delivery charges (including GST). 29. Where the car is leased by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'leased car value' of the EV. Where the EV leased by Origin commences at or about the time the lessor under that lease purchased the EV (as assumed in subparagraph 9(d) of this Ruling), the 'leased car value' will be the cost price of the EV to the lessor (inclusive of GST). 30. The taxable value of a car fringe benefit calculated under the operating cost method is a percentage (representing the extent of the business use percentage applicable to the car) of the total costs of operating the car during the year. The operating costs of the EV determined under paragraph 10(3)(a) will include the Subscription Fees paid by the Employer to Origin and any other costs paid for by the Employer in relation to the operation of the Vehicle. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Ruling: 1. This Ruling sets out the fringe benefits tax (FBT) consequences for an employer (Employer) of an employee (Employee) to whom Origin Energy Electricity Limited (Origin) provides an Electric Vehicle (EV) on a subscription basis under the terms and conditions of an Electric Vehicle Subscription Agreement (Subscription Agreement). 2. All legislative references in this Ruling are to the Fringe Benefits Tax Assessment Act 1986. Terms which are defined in the scheme documents referred to in paragraph 10 of this Ruling have been capitalised. 3. This Ruling does not address: | Who this Ruling applies to: 4. This Ruling applies to you if you, as the Employer, enter into the scheme described in paragraphs 10 to 18 of this Ruling on or after 1 April 2023 and on or before 31 March 2026. 5. This Ruling does not apply to you if you either: 6. This Ruling applies from 1 April 2023 to the Employers specified in paragraph 4 of this Ruling that enter into the scheme from 1 April 2023 until 31 March 2026. 7. However, the Ruling only applies and may be relied on to the extent that there is no change in the scheme or in the entity's involvement in the scheme. If the scheme carried out is materially different from the scheme described at paragraphs 10 to 18 of this Ruling, this Ruling cannot be relied upon and may be withdrawn or modified. 8. Subject to paragraph 3 of this Ruling and the assumptions in paragraph 9 of this Ruling: | Assumptions: 9. This Ruling is made on the basis of the following necessary assumptions: 10. The scheme is identified and described in the following: Note: Certain information has been provided on a commercial-in-confidence basis and will not be disclosed or released under Freedom of Information legislation. 11. For the purposes of describing the scheme, there are no other agreements (whether formal or informal, and whether or not legally enforceable) which an Employer, or any associate of an Employer, will be a party to which are a part of the scheme. 12. All Australian Securities and Investments Commission requirements are, or will be, complied with for the term of the agreements. | Overview of scheme: 13. Origin holds a fleet of EVs (either owned by Origin or leased by Origin under long-term leases) which it is offering to the employees of Origin business customers (Employers) on a monthly subscription basis. 14. Employers that wish to subscribe for one or more EVs from Origin and (since 24 October 2024) are not classified as a 'small' employer by Origin, enter into the Master Agreement with Origin. From 24 October 2024, Employers that are classified as a 'small' employer by Origin are not required to enter into the Master Agreement with Origin. The Master Agreement is an overarching agreement whereby Origin agrees with the Employer to provide, at any time and from time to time during the term of the Master Agreement, an EV directly to an interested Employee on a subscription plan. 15. In order to give effect to the subscription of EVs: 16. The terms of the Subscription Agreement: 17. The Subscription Fee payable to Origin by the Employer covers the hire of the EV, registration, insurance, roadside assistance and servicing costs of the EV. 18. As contemplated by the Order Proposal, the Employer will enter into an effective salary sacrifice arrangement with the Employee under which the Employee's salary will be reduced by the amount of the GST-exclusive portion of the Subscription Fee the Employer is liable to pay Origin for the EV Subscription. Commissioner of Taxation 20 September 2023 | Fringe benefits tax consequences in respect of provision of Electric Vehicle: 19. Subsection 7(1) provides that where, in respect of the employment of an employee, a car held by a person (referred to as the 'provider'): then the application or availability of the car shall be taken to constitute a benefit provided by the provider to the employee in respect of the employment of the employee. 20. Paragraphs 162(1)(a) and (b) respectively provide that a car is held by a person when the car is owned by that person or leased to that person. Origin is a 'person' for FBT purposes. 21. As Origin will either be the person that owns the EV or the person to whom the EV is leased, Origin will hold the EV (and be the provider) for the purposes of section 7. 22. Where the EV under the Subscription Agreement is subscribed for by the Employer and applied to a private use by the Employee or (pursuant to subsections 7(2) or (3)) is taken to be available for the private use of the Employee, the application or availability of the EV under an arrangement between Origin as the provider and the Employer will constitute a car benefit provided by Origin to the Employee in respect of the Employee's employment pursuant to subsection 7(1). 23. However, that car benefit will be an exempt benefit in relation to a year of tax pursuant to subsection 8A(1) where: | Further exemption of car expenses: 24. Where the use of a car is exempted under section 8A, the exemption under subsection 53(1) extends to the provision of any car expense payment benefit, car property benefit and car residual benefit (defined in subsection 53(3)) provided in respect of that car during the same time as the exempted car benefit. 25. Therefore, any car expense payment benefit, car property benefit and car residual benefit provided to the Employee in relation to an EV subscribed for under the Subscription Agreement and attributable to a period during which a car benefit would have been provided to the Employee but for the application of section 8A to treat it as an exempt benefit, is also an exempt benefit in accordance with subsection 53(1). | Calculating the taxable value of car fringe benefits: 26. While the car benefit provided to the Employee under the circumstances referred to in subparagraph 8(a) of this Ruling will be exempt from FBT pursuant to section 8A, the application of section 8A is disregarded for the purposes of working out the Employee's reportable fringe benefits amount (if any) for a year of income in respect of their employment by the Employer (subsection 135P(3)). 27. Therefore, where the provision of the EV to the Employee constitutes a car fringe benefit, defined in subsection 136(1) to mean a fringe benefit that is a car benefit, the taxable value of that car fringe benefit will be calculated by the Employer using the statutory formula method in section 9, unless the Employer elects to use the operating cost method in section 10. 28. The statutory formula method applies a statutory rate to the base value of a car. Where the car is owned by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'cost price' of the EV to Origin (excluding registration and stamp duty), the cost of any fitted non-business accessories and dealer delivery charges (including GST). 29. Where the car is leased by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'leased car value' of the EV. Where the EV leased by Origin commences at or about the time the lessor under that lease purchased the EV (as assumed in subparagraph 9(d) of this Ruling), the 'leased car value' will be the cost price of the EV to the lessor (inclusive of GST). 30. The taxable value of a car fringe benefit calculated under the operating cost method is a percentage (representing the extent of the business use percentage applicable to the car) of the total costs of operating the car during the year. The operating costs of the EV determined under paragraph 10(3)(a) will include the Subscription Fees paid by the Employer to Origin and any other costs paid for by the Employer in relation to the operation of the Vehicle. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).


Appendix: Fringe benefits tax consequences in respect of provision of Electric Vehicle: 19. Subsection 7(1) provides that where, in respect of the employment of an employee, a car held by a person (referred to as the 'provider'): then the application or availability of the car shall be taken to constitute a benefit provided by the provider to the employee in respect of the employment of the employee. 20. Paragraphs 162(1)(a) and (b) respectively provide that a car is held by a person when the car is owned by that person or leased to that person. Origin is a 'person' for FBT purposes. 21. As Origin will either be the person that owns the EV or the person to whom the EV is leased, Origin will hold the EV (and be the provider) for the purposes of section 7. 22. Where the EV under the Subscription Agreement is subscribed for by the Employer and applied to a private use by the Employee or (pursuant to subsections 7(2) or (3)) is taken to be available for the private use of the Employee, the application or availability of the EV under an arrangement between Origin as the provider and the Employer will constitute a car benefit provided by Origin to the Employee in respect of the Employee's employment pursuant to subsection 7(1). 23. However, that car benefit will be an exempt benefit in relation to a year of tax pursuant to subsection 8A(1) where: | Further exemption of car expenses: 24. Where the use of a car is exempted under section 8A, the exemption under subsection 53(1) extends to the provision of any car expense payment benefit, car property benefit and car residual benefit (defined in subsection 53(3)) provided in respect of that car during the same time as the exempted car benefit. 25. Therefore, any car expense payment benefit, car property benefit and car residual benefit provided to the Employee in relation to an EV subscribed for under the Subscription Agreement and attributable to a period during which a car benefit would have been provided to the Employee but for the application of section 8A to treat it as an exempt benefit, is also an exempt benefit in accordance with subsection 53(1). | Calculating the taxable value of car fringe benefits: 26. While the car benefit provided to the Employee under the circumstances referred to in subparagraph 8(a) of this Ruling will be exempt from FBT pursuant to section 8A, the application of section 8A is disregarded for the purposes of working out the Employee's reportable fringe benefits amount (if any) for a year of income in respect of their employment by the Employer (subsection 135P(3)). 27. Therefore, where the provision of the EV to the Employee constitutes a car fringe benefit, defined in subsection 136(1) to mean a fringe benefit that is a car benefit, the taxable value of that car fringe benefit will be calculated by the Employer using the statutory formula method in section 9, unless the Employer elects to use the operating cost method in section 10. 28. The statutory formula method applies a statutory rate to the base value of a car. Where the car is owned by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'cost price' of the EV to Origin (excluding registration and stamp duty), the cost of any fitted non-business accessories and dealer delivery charges (including GST). 29. Where the car is leased by Origin (as the provider), the base value of the EV subscribed for under the Subscription Agreement is determined under paragraph 9(2)(a) by reference to the 'leased car value' of the EV. Where the EV leased by Origin commences at or about the time the lessor under that lease purchased the EV (as assumed in subparagraph 9(d) of this Ruling), the 'leased car value' will be the cost price of the EV to the lessor (inclusive of GST). 30. The taxable value of a car fringe benefit calculated under the operating cost method is a percentage (representing the extent of the business use percentage applicable to the car) of the total costs of operating the car during the year. The operating costs of the EV determined under paragraph 10(3)(a) will include the Subscription Fees paid by the Employer to Origin and any other costs paid for by the Employer in relation to the operation of the Vehicle. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).


What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling. | (Note: This is a consolidated version of this document. Refer to the ATO Legal database (ato.gov.au/law) to check its currency and to view the details of all changes.) | This Ruling has been given on the basis that the entity who applied for the Ruling, and their associates, will abide by strict terms of use. Any failure to comply with the terms of use may lead to the withdrawal of this Ruling. | Potential participants must form their own view about the commercial and financial viability of the product. The Commissioner recommends a financial (or other) adviser be consulted for such information.


Legislative references: FBTAA 1986 7 FBTAA 1986 7(1) FBTAA 1986 7(1)(a) FBTAA 1986 7(1)(b)(ii) FBTAA 1986 7(2) FBTAA 1986 7(3) FBTAA 1986 7(7) FBTAA 1986 8(2) FBTAA 1986 8A FBTAA 1986 8A(1) FBTAA 1986 8A(2) FBTAA 1986 8A(3) FBTAA 1986 8A(4) FBTAA 1986 8A(5) FBTAA 1986 9 FBTAA 1986 9(2)(a) FBTAA 1986 10 FBTAA 1986 10(3)(a) FBTAA 1986 20 FBTAA 1986 53 FBTAA 1986 53(1) FBTAA 1986 53(3) FBTAA 1986 67 FBTAA 1986 135P(3) FBTAA 1986 136(1) FBTAA 1986 162(1)(a) FBTAA 1986 162(1)(b)