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  • Claiming a tax deduction for motor vehicle expenses

    As a business owner, you can claim a tax deduction for expenses for motor vehicles – cars and certain other vehicles – used in running your business.

    For a summary of this content in poster format, see Motor vehicle expenses (PDF 764KB)This link will download a file.

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    Types of vehicles

    Cars (for income tax purposes) are defined as motor vehicles (including four-wheel drives) designed to carry both:

    • a load less than one tonne
    • fewer than nine passengers.

    Other vehicles include:

    • motorcycles
    • vehicles designed to carry either
      • one tonne or more (such as a utility truck or panel van)
      • nine passengers or more (such as a minivan).
       

    The motor vehicle must be owned, leased or under a hire-purchase agreement.

    If you operate your business as a company or trust, you can also claim for motor vehicles provided to an employee or their associate as part of their employment.

    Expenses you can claim

    You can claim:

    • fuel and oil
    • repairs and servicing
    • interest on a motor vehicle loan
    • lease payments
    • insurance cover premiums
    • registration
    • depreciation (decline in value).

    Separate private from business use

    If a motor vehicle is used for both business and private use, you must be able to correctly identify and justify the percentage that you are claiming as business use. The percentage that is for private use isn't claimable. This is an area where we often see errors made.

    You can use a logbook or diary to record private versus business travel.

    Travelling between your home and your place of business is considered private use, unless you are a home-based business and your trip was for business purposes.

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    Last modified: 19 Aug 2019QC 33720