New Cents per Kilometre Rates for 2015-16
From 1 July 2015 the cents per kilometre method for calculating car tax deductions has been simplified to a single rate of 66 cents per kilometre for all cars travelling up to 5000 business kilometres per year.
The rate for cars with an engine capacity under 1.6 litres has increased by 1 cent per kilometre, but the rate for cars over 1.6 litres has decreased by 10 or 11 cents per kilometre.
At the same time the 12% of original value and the one-third of actual expenses methods have been removed, leaving only the cents per kilometre and logbook methods as valid ways of calculating car tax deductions.
Draft legislation has been prepared to give effect to these Budget proposals. As the changes appear to be uncontroversial there is no reason that the changes will not be passed into law soon.
While the new rate will not be used for tax purposes until it is time to lodge 2015-16 tax returns, employers often use the ATO cents per kilometre rates when paying car allowances to employees who use their own cars for work.