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Rate per kilometre method of deducting car expenses 5,000 business kilometres or less.



Press Release  

Senator the Hon Rod Kemp  



Rate Per Kilometre Method of Deducting Car Expenses 5,000 Business Kilometres 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 1999-2000 income year. The rates apply to no more than 5,000 business kilometres use for a car during the income year. A taxpayer who travels more than 5,000 business kilometres during the year may elect to use this method because of its simplicity but can only claim for 5,000 kilometres.


This method, known as the ‘cents per kilometre’ method, allows a taxpayer to claim a deduction for 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 1999-2000 income year are set out below. Since the 1986-1987 income year, the rates in the Regulations have followed the rates of motor vehicle allowance for the Commonwealth Public Service set out by the Department of Employment, Workplace Relations and Small Business. The rates are reviewed each year.


Taxpayers whose claim for business use of a car does not exceed 5,000 kilometres during the income year ending on 30 June 2000 may claim a deduction equal to the number of business kilometres multiplied by the rate per kilometre as shown for 1999-2000 income year in the schedule below.


The 1999-2000 income year rates are also used to calculate the taxable value of a small number of fringe benefits (such as remote area holiday travel) provided in the fringe benefits tax year ending 31 March 2000, These rates should also be used as the proposed rates for fringe benefits provided in the year ending 31 March 2001.





Engine capacity of car not powered by a rotary engine (cubic centimetres)

Engine capacity of car powered by a rotary engine (cubic centimetres)

Rate per kilometre (cents)

Small car

Not exceeding 1600cc

Not exceeding 800cc


Medium car

Exceeding 1600cc but not exceeding 2600cc

Exceeding 800 but not exceeding 1300cc


Large car

Exceeding 2600cc

Exceeding 1300cc



8 February 2000

Media Contacts: Richard Allsop Assistant Treasurer’s Office (02) 6277 7360 Rosemary Everett Australian Taxation Office (02) 6216 1275