Income Tax Assessment Act 1997
CHAPTER 2
-
LIABILITY RULES OF GENERAL APPLICATION
PART 2-5
-
RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS
Division 28
-
Car expenses
Subdivision 28-C
-
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.
28-25(3)
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 note28-25(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.
Example:
If the car travelled 5,085 business kilometres, you could claim for 5,000, and would lose the extra 85.
28-25(3)
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.
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.
Note:
Examples of operating costs include fixed costs such as registration, insurance and depreciation, and variable costs such as fuel and maintenance.
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.