Law Administration Practice Statement PS LA 1999/2
Calculating joint car expense deductions
Date of issue: 29 April 1999
Draft: False
Withdrawn: True

1. How taxpayers should calculate a joint car expense deduction: For income years before 1 July 2015, taxpayers can use any one of the 4 calculation methods to calculate a joint car expense deduction: • cents per kilometre • 12% of the original value • one-third of actual expenses • logbook. • cents per kilometre • 12% of the original value • one-third of actual expenses • logbook. Only the first and last method apply from 1 July 2015. A taxpayer should use only one method in any one income year in relation to a specific vehicle. However, each of the joint owners can use a different method to calculate their deductions if they wish. | 2. Method 1 – cents per kilometre: Each joint owner or joint lessee can claim a maximum deduction of 5,000 kilometres for each income year. That limit applies to a particular taxpayer in relation to a particular car, not to the car itself. So, if each of the joint owners uses the car for separate income-producing purposes, they can each claim up to 5,000 kilometres. | 3. Method 2 – 12% of the original value: If the taxpayer travels more than 5,000 work-related kilometres in the car during in an income-producing period, they can use Method 2 to calculate their deduction. Method 2 allows each of the joint owners to claim a proportion of the original cost of the car, to a total of 12%. That is, if there are 2 joint owners, then they can each claim a deduction of 6% of the original cost of the car. | 4. Method 3 – one-third of actual expenses: Like Method 2, Method 3 is only available to taxpayers who have travelled more than 5,000 work-related kilometres in the car in an income year. Taxpayers using this method can deduct one-third of the car's expenses (whether wholly their own or incurred jointly with other owners or lessees; and not including capital expenses) plus one third of their share of the decline in value of the car. | 5. Method 4 – logbook: If the taxpayer uses a vehicle logbook, it must state: • when the logbook period begins and ends • the car's odometer readings at the start and end of the logbook period • the total number of kilometres that the car travelled • the number of kilometres travelled for work • the business use percentage. • when the logbook period begins and ends • the car's odometer readings at the start and end of the logbook period • the total number of kilometres that the car travelled • the number of kilometres travelled for work • the business use percentage. For each logbook period, the taxpayer would calculate their deductions as: (total kilometres the taxpayer travelled to produce their assessable income ÷ total number of kilometres the car travelled) × (total car expenses incurred + the decline in value for the period) (total kilometres the taxpayer travelled to produce their assessable income ÷ total number of kilometres the car travelled) × (total car expenses incurred + the decline in value for the period) | 6. More information: For more information, see: • Motor vehicle and car expenses • Work-related car expenses calculator • Motor vehicle and car expenses • Work-related car expenses calculator


Additional content:
Refer to end of document for amendment history. Prior versions can be requested by emailing TCNLawPublishingandPolicy@ato.gov.au if required. This document incorporates revisions made since original publication. View its history and amending notices, if applicable. | 2. Method 1 – cents per kilmetre | The term depreciation updated to 'decline in value'. | Updated in line with current ATO style and accessibility requirements. | Included dates when different calculations can be used. | Updated to new LAPS format and style. | References to IT 2398 and TD 93/177 (withdrawn) removed. | 'Tax Office' updated to 'ATO' as per Style Guide recommendations. | Legislative references updated. | File 99/4924-1; 96/9842-6; 96/4745-7; 1-7P6KYPU; 1-14ISSDHD