| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1051677033494
Date of advice: 15 May 2020
Ruling
Subject: Work related car expenses under logbook method
Question 1
Are you entitled to use the log book method to calculate allowable deductions for your electric car?
Answer
Yes, It is recognised that an electric car satisfies the definition of a car for the purpose of Division 28 of the Income Tax Assessment Act 1997.
Division 28 of the ITAA 1997 sets out the methods for working out deductions for car expenses if you own, lease or hire a car under a hire purchase agreement.
To use the logbook method, you multiply the amount of each car expense by the business use percentage. The expense must qualify as a deduction under another provision or would qualify if you used the car only in producing assessable income (subdivision 28-F of the ITAA 1997).
The business use percentage is calculated as:
The number of business kilometres the car travelled in the period
The total number of kilometres the car travelled in the period.
Therefore the "logbook" method, prescribed under Subdivision 28-F of the ITAA 1997 would be available to calculate a deduction for car expenses.
Question 2
Are the costs associated with charging an electric vehicle an allowable work related deduction?
Answer
Yes, Section 8-1 of the Income Tax Assessment Act 1997 states that you can deduct from your assessable income any loss or outgoing to the extent that;
- it is incurred in gaining or producing assessable income; or
- it is necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income.
However, you cannot deduct a loss or outgoing under this section to the extent that it is of private or domestic in nature, capital, or capital in nature. A loss or outgoing that you can deduct under this section is called a general deduction
As such recharging the car would be deemed a running cost and would satisfy the definition of an expense's for the purpose of Section 8-1 of the ITAA 1997.
This ruling applies for the following period:
Year ending 30 June 2020
The scheme commences on:
1 July 2019
Relevant facts and circumstances
Taxpayer purchased an electric vehicle using personal funds.
The car is powered by an electric motor and therefore does not have piston engine and as such the vehicle does not use contemporary fuel such as, petrol, diesel or oil.
Since purchasing the vehicle the taxpayer has been the registered owner of the vehicle.
Taxpayer uses vehicle in the course of your employment. The vehicle is mostly for business use.
Taxpayer installed three phase power at your residential home.
The vehicle is charged mostly at the taxpayers residential home and some of the time they use other charging stations.
Taxpayer maintains records to enable them to claim the work related portion of car expenses under logbook method.
Taxpayer pays for all the vehicles running expenses out of your own pocket.
Relevant legislative provisions
Income Tax Assessment Act 1997, Section 8-1
Income Tax Assessment Act 1997, Subdivision 28-F to 28-I
Income Tax Assessment Act 1997, Section 28-125
Income Tax Assessment Act 1997, Section 28-170
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
