Commonwealth Numbered Regulations - Explanatory Statements

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INCOME TAX REGULATIONS (AMENDMENT) 1997 NO. 68

Statutory Rules 1997 No. 68

Issued by the Authority of the Assistant Treasurer

Income Tax Assessment Act 1936

Income Tax Regulations (Amendment)

The Governor-General may make regulations under section 266 of the Income Tax Assessment Act 1936 (the Act) for the purposes of the Act.

Schedule 2A to the Act outlines four methods for taxpayers to calculate the amount of deduction they can claim for car expenses. If a taxpayer does not wish to claim for more than the first 5,000 km of the income-producing use of a car owned or leased by the taxpayer, he or she can elect to claim a deduction for car expenses using the statutory formula set out in subsection 3-2(1) in Schedule 2A of the Act. That is, the deduction is calculated by multiplying the number of business kilometres travelled, by the prescribed rate applicable to the car's engine capacity. The rates for the purposes of section 3-2 of Schedule 2A to the Act are prescribed by regulation 147 and Schedule 6 of the Income Tax Regulations.

The purpose of the regulations is to prescribe the relevant rates for the purposes of section 3-2 in Schedule 2A of the Act that are to apply for the year of income commencing 1 July 1996. The regulations amends Schedule 6 of the Income Tax Regulations (the Regulations) by inserting a new Part 11 to achieve this.

The 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 1997.

The Regulations are amended as follows:

Regulation 1 - provides for the amendment of the Regulations.

Regulation 2 - inserts a new Part 11 in Schedule 6 to the Regulation that sets out the car expense deduction rates for the year commencing 1 July 1996.

The Regulations commenced on gazettal.