In Australia, if you need to use your own car because of your job needs, you can tax the cost of your car. But only work-related expenses can be deducted, and driving from home to work and returning home from work is not tax deductible for non-work-related cars.
The following are refundable working vehicles:
- Drive from the place where you first worked to the place where you got another job;
- Drive from the normal workplace to another (for example, the company has two different offices, or you need to drive from the company to meet your customers);
- Drive from your home to another office (not where you usually work).
Four methods of calculation provided by the Australian Inland Revenue Department:
- Cost per kilometer: this is the most commonly used method. The Inland Revenue Bureau gives a fixed cost per kilometer based on the volume of the vehicle, and then multiplies the mileage of the working car. If you use this method to calculate the cost of a car, the Inland Revenue Department does not need you to provide a receipt for the cost of the car, but you must be able to prove to the IRD how you calculated the mileage used for your work purposes. And this way, you can declare up to 5,000 km. Please note: this 5000km does not mean that each car can only declare 5000 km, but for each taxpayer;
- 12% of your car purchase fee: if your working car exceeds 5,000 km a year, you can report 12% of your car purchase fee. But this is subject to the luxury car ceiling, starting from July 1, 2012, the luxury car ceiling is $59133. This means that, in this way, a maximum of $7096 can be declared ($59133 x 12 per cent); If you use this method to calculate the cost of the car, the Inland Revenue Department does not need you to provide a receipt for the cost of the car, but must prove to the Inland Revenue Department how you calculate the mileage used for work purposes;
- 1/3 of the actual cost: if your working car exceeds 5,000 km a year, you can declare 1/3 of the car's oil, insurance, road, interest, depreciation and maintenance costs, etc. But it does not include the cost of buying a car or repaying the principal of the loan. If you use this method to calculate the cost of the car, the Inland Revenue Department needs you to keep a receipt for all the car expenses, but the fuel cost can be estimated according to the mileage of the car;
- Carlog book: whether or not your working car exceeds 5000 km, you can choose this method to calculate the cost of the car. But you have to record a Logbook, to figure out the percentage of your car for work and personal use. Then multiply the percentage of the working car by the total cost of the car. If you use this method to calculate the cost of your car, the Inland Revenue Department will need you to keep a receipt for all the car expenses, but the fuel cost can be estimated according to the mileage of the car.
In short, as a taxpayer, you can choose either of the above or use a different method each year to declare the cost of the car. If you entrust a professional accountant to help you with your tax returns, tax accountants will use four different methods to calculate the cost of the car, and then select the data that will be most beneficial to the taxpayer.
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