Federal Register of Legislation - Australian Government

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SLI 2012 No. 47 Regulations as made
This regulation amends the Income Tax Assessment Regulations 1997 to insert the cents per kilometre rates for 2011-12 income year for calculating income tax deductions for car expenses.
Administered by: Treasury
Registered 11 Apr 2012
Tabling HistoryDate
Tabled HR08-May-2012
Tabled Senate10-May-2012
Date of repeal 09 Aug 2013
Repealed by Treasury (Spent and Redundant Instruments) Repeal Regulation 2013

EXPLANATORY STATEMENT

Select Legislative Instrument 2012 No. 47

 

Issued by authority of the Assistant Treasurer

Income Tax Assessment Act 1997

Income Tax Assessment Amendment Regulation 2012 (No. 1)

Section 909‑1 of the Income Tax Assessment Act 1997 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

The purpose of the amending regulations is to insert the ‘cents per kilometre’ rates for calculating tax deductions for car expenses for the 2011-12 income year in Part 2 of Schedule 1 to the Income Tax Assessment Regulations 1997 (the Principal Regulations).

Motor vehicle expenses incurred in the course of deriving assessable income or carrying on a business are tax deductible under section 8-1 of the Act.  Division 28 of the Act outlines the rules for calculating deductions for car expenses. The taxpayer can calculate a deduction for car expenses using one of four specified methods. The ‘cents per kilometre’ method in section 28-25 is one of the four methods available to taxpayers.  To calculate the deduction under the ‘cents per kilometre’ method, the number of business kilometres the car travelled during the year of income is multiplied by a specified number of cents. The cents per kilometre rate is determined in relation to the car’s engine capacity and is prescribed in the Principal Regulations. This method can be used for the first 5,000 business kilometres only. If a taxpayer wishes to claim for more than 5,000 business kilometres, he or she must use one of the other methods outlined in Division 28 of the Act.

The cents per kilometre rates are updated every year by regulation.  The rates are revised each year and the rates currently prescribed apply for the 2010-11 financial year.  The rates in the Principal Regulations increase when there is an upward movement of the Private Motoring Subgroup (series ID A2326656J) within the Consumer Price Index (ABS catalogue number 6401.0).

The rates for the 2011-12 income year would not change from the 2010‑11 rates because the Private Motoring Subgroup index at September 2011 was still below its level at September 2008 and are as follows:

 

 

 

 

Description

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

Engine capacity of car powered by a rotary engine (cc)

Rate per kilometre (cents)

Small car

Not exceeding 1600cc

Not exceeding 800cc

63

Medium car

Exceeding 1600cc but not exceeding 2600cc

Exceeding 800cc but not exceeding 1300cc

74

Large car

Exceeding 2600cc

Exceeding 1300cc

75

 

The Regulation is also relevant for the purposes of the Fringe Benefits Tax Assessment Act 1986 (FBTAA 1986).  The definition of ‘basic car rate’ in subsection 136(1) of the FBTAA 1986 provides that the rate is the same as that prescribed for the purposes of section 28‑25 of the Act.  ‘Basic car rate’ is used in the calculation of the taxable values of a number of fringe benefits.

No consultation was undertaken on the Regulation.  However, the process for updating the cents per kilometre rates is well established and is not controversial.  No taxpayers are adversely affected by changes to the cents per kilometre rates.

This Regulation commences on the day after it is registered on the Federal Register of Legislative Instruments.


Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Income Tax Assessment Amendment Regulation 2012 (No. 1)

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

 

Overview of the Legislative Instrument

The purpose of the Legislative Instrument is to prescribe the ‘cents per kilometre’ rates for calculating tax deductions for car expenses for the 2011-12 income year.

 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.