Commonwealth Numbered Regulations - Explanatory Statements

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Issued by authority of the Assistant Treasure

Income Tax Assessment Act 1997

Income Tax Assessment Amendment Regulations 2001 (No. 2)

The Governor-General may make regulations under section 909-1 of the Income Tax Assessment Act 1997 (the Act) for, the purposes of the Act.

The purpose of these regulations was to insert into Regulation 28-25.01 of the Income Tax Assessment Regulations 1997 (the Regulations), for the purposes of Division 28 of the Act, the 'cents per kilometre' rates for use in calculating a deduction for car expenses for the 20002001 income year.

These regulations will also be used to calculate the taxable value of a number of fringe benefits that relate to motor vehicles (such as remote area holiday travel) provided in the fringe benefits tax year ending 31 March 2001. This is achieved by the employer using the rates in the regulations for the purposes of determining the amount of reimbursement to the employee where, for example, the employee has used his or her own vehicle for the holiday travel.

Division 28 of the Act outlines the rules for working out deductions for car expenses if a taxpayer owns or leases a car or hires a car under a hire purchase agreement. The taxpayer may calculate a deduction for car expenses using one of four specified methods. Under the 'cents per kilometre' method in section 28-25 of the Act, the number of business kilometres the car travelled during the year of income, up to a maximum of 5,000 kms, is multiplied by the number of cents per kilometre for the car. The prescribed 'cents per kilometre' rate is determined in relation to the car's engine capacity as set out in Regulation 28-25.01.

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.

Since the 1986-1987 income year, the rates in the Regulations had 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 revised each year.

The new rates for the 2000-2001 income year are as follows:


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

Engine capacity of car
powered by a rotary
engine (cubic

Rate per

Small car

Not exceeding 1600cc

Not exceeding 800cc


Medium car

Exceeding 1600cc but
not exceeding 2600cc

Exceeding 800cc but not
exceeding 1300cc


Large car

Exceeding 2600cc

Exceeding 1300cc


Details of the Regulations are as fellows.

Regulation 1: Names the Regulations.

Regulation 2: Provides that the Regulations commenced on gazettal.

Regulation 3: Provides that Schedule 1 amends the Regulations to insert the rates for the 20002001 year of income.

Schedule 1: This inserts item 4 into Regulation 28-25.01 of the Regulations for the purposes of Division 28 of the Act, the 'cents per kilometre' rate for the 2000-2001 income year.

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