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Businesses claiming the government’s 20 per cent investment boost on new vehicles must now use new Fringe Benefit Tax (FBT) valuation rates.
Although the investment boost reduces a vehicle’s tax book value, it does not
reduce FBT proportionally.
The new rates are:
- Yearly: 41.4 per cent (GST-inclusive) or 47.61 per cent (GST-exclusive)
- Quarterly: 10.35 per cent (GST-inclusive) or 11.90 per cent (GST-exclusive)
These higher rates only apply where the investment boost has been claimed. A
minimum tax book value of $7,317 also applies.
What’s Proposed for 2027?
Budget 2026 proposed replacing the current day-counting system with a simpler
category-based approach, based on actual vehicle use.
Different FBT rates would also apply depending on fuel type, with EVs attracting
lower rates.
These changes are still proposals and may change before the proposed April 1,
2027 start date.
The Bottom Line
If you’ve claimed the Investment Boost on a vehicle, ensure you’re using the
correct FBT rates.
