Car expenses and remote zone tax changes: drafts

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Car expenses and remote zone tax changes: drafts

Draft legislation sets out a new single cents per kilometre method (66c/km in 2015-16) for work related car expense deduction methods, as well as the limiting the eligibility for the Zone Tax Offset for FIFO workers.

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A new single cents per kilometre method (to be set at 66c/km in 2015-16) for work related car expense deduction methods, and the limiting the eligibility for the Zone Tax Offset for FIFO workers, are contained in draft legislation released by the Treasurer. Both of these measures were announced in the 2015-16 budget.

Work related car expense deductions


New measures to simplify the cents per kilometre method will provide a single cents per kilometre rate for the 2015-16 income year: “Taxpayers will continue to be able to choose to apply the cents per kilometre method (for up to 5,000 business kilometres travelled), or the logbook method, depending on which method they feel best captures the actual running costs of their vehicle. In the 2015-16 income year the cents per kilometre rate will be set at 66 cents per kilometre.”

An exposure draft of the amendments has been released for public consultation.  

Fly-in fly-out workers and the Zone Tax Offset


The Zone Tax Offset (ZTO) is a concessional tax offset available to individuals in recognition of the isolation, uncongenial climate and high cost of living in certain identified locations. 
 
Changes are to be made to the tax offset to remove 'fly in-fly out' and 'drive in drive out' (FIFO) employees' eligibility to claim the ZTO. The Tax Office estimates about 20 per cent of the more than 500,000 claimants do not live full time in the zones.

From the 2015-16 income year, access to the ZTO will be restricted to people whose normal residence is located within a zone or special area of a zone. People who fly or drive to a zone for work related purposes but do not ordinarily reside in the zone will no longer be eligible to claim the offset.

An exposure draft of the amendments has been released for public consultation. 

Submissions close on 5 August 2015.
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