Income Tax Assessment Act 1997
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|
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.
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.
Examples of operating costs include fixed costs such as registration, insurance and depreciation, and variable costs such as fuel and maintenance.