CA ANZ: Employees shouldn't lose EV tax concession when moving between entities in the same corporate group

Chartered Accountants ANZ

13 October 2026

Chartered Accountants Australia and New Zealand (CA ANZ) has warned that proposed changes to the electric vehicle fringe benefits tax (EV FBT) exemption could leave employees worse off where a promotion or corporate restructure sees them move to another entity within the same corporate group.

In its response to the draft legislation, CA ANZ supported the Government’s decision to phase down the EV FBT exemption but warned that the proposed transitional rules could undermine grandfathering protections and unfairly disadvantage employees who entered into arrangements in good faith under the existing rules.

Under the draft rules, employees who salary package an eligible electric vehicle before the exemption ends can access the EV FBT exemption under grandfathering arrangements.

However, CA ANZ is concerned those protections may not follow an employee when they move between related employers within the same corporate group, potentially turning an ordinary promotion or internal restructure into an unexpected tax consequence.

CA ANZ Australian Leader, Tax, Superannuation and Financial Services, Susan Franks, said the proposal does not reflect how modern workplaces operate.

"People who made long-term financial commitments based on the existing rules should be able to rely on the protections they were promised," Ms Franks said.

"An employee shouldn't lose access to grandfathered EV tax concessions simply because they move to another employer within the same corporate group or government structure."

"The policy intent is to grandfather existing arrangements. That protection shouldn't disappear because of routine employment changes that have no practical impact on the vehicle arrangement itself."

The EV and proposed capital gains tax reforms expose a wider problem: grandfathering rules can become so technical or restrictive that they erode the very certainty they are meant to provide, including protection for gains accrued before new rules commence.

"Grandfathering is supposed to give taxpayers confidence when the rules change," Ms Franks said.

"If taxpayers can lose those protections because of technical drafting, complex calculations or administrative hurdles, the protection starts to lose its value."

"If governments want taxpayers to trust reform, grandfathering rules need to be practical, clear and fair."

About Chartered Accountants Australia and New Zealand

Chartered Accountants Australia and New Zealand represents nearly 143,000 financial professionals, supporting them to make a difference to the businesses, organisations and communities in which they work and live. Chartered Accountants are known as Difference Makers. The depth and breadth of their expertise helps them to see the big picture and chart the best course of action.

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