Modernising the calculation of work related car expense deductions

This consultation process has now been completed. Submissions available
Consultation Type
Exposure Draft

Key Documents

The Treasurer announced in the 2015‑16 Budget that the methods used for calculating work‑related car expense deductions would be simplified and modernised. An exposure draft of the amendments is being released for public consultation.

Currently, taxpayers have an option to use one of four methods to determine their work‑related car expense deductions.  The Government is reducing the number of methods by removing the '12 per cent of original value method' and the 'one-third of actual expenses method'. These methods have been used by fewer than 2 per cent of those who claim work-related car expenses.

The other two methods, the 'cents per kilometre method' and the 'logbook method' are being retained.  The 'cents per kilometre method' is also being modernised by replacing the three current rates based on engine size with one rate set at 66 cents per kilometre, which applies to all motor vehicles.  The Commissioner of Taxation will have responsibility for updating the rate in later income years.

The amendments apply to the 2015‑16 income year and later income years.


6 submissions were received for this consultation, including 1 confidential submission.

Hopkins, Peter - pdf 29.03 KB
Sutton, Mark - pdf 142.3 KB