Private ruling: Motor vehicle expenses
Published: November 2011
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to claim up to 5,000 km for each of two cars? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 28-25

Reasons for decision: Summary: Work-related car expenses must satisfy the requirements of Division 28 of the Income Tax Assessment Act 1997 (ITAA 1997) which sets out the various methods for claiming car expenses. Guidelines for claiming car expenses under the cents per kilometre method are contained in Subdivision 28-C of the ITAA 1997. Section 28-25 of the ITAA 1997 allows a deduction for car expenses calculated using the cents per kilometre method. Under the cents per kilometre method: The deduction is calculated by multiplying the number of business kilometres the car travelled during the year by the number of cents per kilometre based on the cars engine capacity; A maximum of 5,000 business kilometres may be claimed for each car; A taxpayer does not need written evidence of car expenses but needs to be able to show how they calculated their business kilometres. In your case, you have two cars which are used for business purposes. Therefore, you are entitled to claim up to 5,000 km for each car.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You own two cars with your spouse. | You use both cars for work related travel. | Your employer pays you two different rates based on the cents per kilometre rate provided by the Tax Office. The amount appears on your PAYG summary.