Rate per Kilometer Method of Deducting Car Expenses 5,000 Business Kilometers or Less

The Assistant Treasurer, Senator Rod Kemp, today announced the rates at which certain taxpayers will be able to claim income tax deductions for car expenses during the 1997-98 income year.

The rates apply to no more than 5,000 business kilometres use for a car during the income year (a taxpayer whose car does travel more than 5,000 business kilometres during the year may elect to use this method because of its simplicity but can only claim 5,000 kilometres).

In those cases the law allows a taxpayer to elect to deduct car expenses on a per kilometre basis, instead of by reference to actual car expenses fully substantiated by documentary evidence.

The rates applicable for the 1997-98 income year appear below.

Taxpayers whose claim for business use of a car does not exceed 5,000 kilometres during the income year ending on 30 June 1998 may claim a deduction equal to the number of business kilometres multiplied by the rate per kilometre.

The rates are also used to calculate the taxable value of a small number of miscellaneous fringe benefits (such as remote area holiday travel) provided in the fringe benefits tax year ending 31 March 1998.

15 May 1998

Contact Officer:
Penny Farnsworth,
Senator Kemps Office
(02) 6277 7360

Paul Southwell,
Australian Taxation Office
(02) 6216 2625