| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012598923829
Ruling
Subject: Mileage allowance
Question
Is your cents per kilometre payment an assessable allowance that is included on your tax return?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2014
The scheme commences on:
1 July 2013
Relevant facts and circumstances
You receive a mileage allowance calculated on a per kilometre basis.
The allowance is shown separately on your PAYG payment summary and no tax is withheld.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 6-5(2)
Income Tax Assessment Act 1997 Section 15-70
Reasons for decision
Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. Allowances are ordinary income for the purposes of subsection 6-5(2) of the ITAA 1997.
'Ordinary income' is generally considered to include:
• amounts received in return for personal services, whether received in the capacity of an employee or otherwise;
• amounts received periodically or regularly and which the recipient relies on for the maintenance of themselves and/or their dependants (Federal Commissioner of Taxation v. Dixon (1952) 86 CLR 540).
Amounts which are paid by an employer to an employee as a reimbursement for car expenses calculated on a per km basis is income in the hands of the employee and assessable to the employee under section 15-70 of the ITAA 1997.
In your case, your employer pays you a mileage allowance. The payment is calculated on a per kilometre basis. Therefore this payment falls within the definition of assessable income and the amount will be included as part of your income in your tax return.