Income Tax Assessment Act 1997
CHAPTER 2
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LIABILITY RULES OF GENERAL APPLICATION
PART 2-5
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RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS
Division 28
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Car expenses
Subdivision 28-C
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The
"
cents per kilometre
"
method
SECTION 28-25
How to calculate your deduction
28-25(1)
To calculate your deduction using the " cents per kilometre " method, use this formula:
28-25(2)
But you can use this formula for the first 5,000 *business kilometres only. If the *car travelled more than 5,000 business kilometres, you must discard the kilometres in excess of 5,000.
Business kilometres are kilometres the *car travelled in the course of:
(a) producing your assessable income; or
(b) your *travel between workplaces.
28-25(4)
For the purposes of subsection (1), the Commissioner may, by legislative instrument, determine rates of cents per kilometre for cars for an income year.
28-25(5)
In determining a rate, the Commissioner must have regard to the average operating costs for the cars to be covered by that rate.
To calculate your deduction using the " cents per kilometre " method, use this formula:
| Number of *business kilometres travelled by the *car in the income year | × | Rate of cents/kilometre determined under subsection (4) for the car for the income year |
View history note
Hide history noteBut you can use this formula for the first 5,000 *business kilometres only. If the *car travelled more than 5,000 business kilometres, you must discard the kilometres in excess of 5,000.
Example:28-25(3)If the car travelled 5,085 business kilometres, you could claim for 5,000, and would lose the extra 85.
Business kilometres are kilometres the *car travelled in the course of:
(a) producing your assessable income; or
(b) your *travel between workplaces.
You calculate the number of business kilometres by making a reasonable estimate.
For the purposes of subsection (1), the Commissioner may, by legislative instrument, determine rates of cents per kilometre for cars for an income year.
In determining a rate, the Commissioner must have regard to the average operating costs for the cars to be covered by that rate.
Note:
Examples of operating costs include fixed costs such as registration, insurance and depreciation, and variable costs such as fuel and maintenance.
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