Private ruling: Motor vehicle repairs
Date of advice: 5 March 2019
Published: May 2019
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are the expenses deductible if they are incurred on repairing the engine of a motor vehicle used in the business to earn assessable income? | A1: Yes. Section 25-10 of the Income Tax Assessment Act 1997 specifically allows a deduction for the cost of repairs made to a depreciating asset that you held or used for the purpose of producing assessable income. As the motor vehicle you purchased is a depreciating asset and will be used by you for the purpose of producing assessable income, you can claim a deduction for the cost of any repairs, you must exclude any private use of the vehicle from your deduction.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You purchased a vehicle for use in earning assessable income in your business. You incurred some costs initially to bring the vehicle to the condition needed for it to operate for business use. You started using the vehicle for business purposes. Your vehicle broke down while being used in the business to earn assessable income. You incurred $XXXX on repairs to the engine.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 25-10