Cents per kilometre method

The cents per kilometre method is still available for use with some changes. Separate rates based on the size of the engine are no longer available from 1 July 2015. Under the revised method for 2016/17 income year

  • 66 cents per kilometre, maximum 5,000 kilometres per car.
  • Written evidence is not required, however, you need to be able to show how the kilometres were worked out. In other words, keep a diary of where you went.
  • If sharing a vehicle a claim of up to 5,000 kilometres each can be made if you both use the car for separate income-producing purposes.

For more information visit the ATO's website

Car Limit Cost

From July 2017, the Australian Tax Office (ATO) has increased the upper limit cost used to work out the depreciation. The new limit for 2017-2018 is now $57,581.

Generally, if purchasing a car and the price is more than the car limit, the maximum amount of GST credit that can be claimed is one-eleventh of the car limit amount.

A GST credit for any luxury car tax when purchasing a luxury car cannot be claimed, regardless of how much it is used in carrying on your business.

Luxury Car Tax

The luxury car tax threshold has also been increased to $64,094.

The ATO has also sent out a reminder that GST credits cannot be claimed for luxury car taxes upon purchasing any luxury car, even if the car is used solely for business purposes.