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ATO unveils new tax rules for electric car owners: 'Can't include'

The Australian Taxation Office has made it easier for EV drivers to make deductions.

Person grabbing an electric vehicle charger next to another photo of someone doing their tax rerturn
Aussies who use their electric vehicles for work will be able to claim deductions using a new guideline. (Source: Getty)

For electric car owners across Australia who use their vehicles for work, the Australian Taxation Office (ATO) has some news for you. There are new guidelines to help you if you're claiming deductions related to charging your vehicle.

Electric car owners were forced to do some mathematic gymnastics to determine how much they had spent in the financial year on keeping their vehicles juiced up. However, the ATO has now brought in a flat rate to make this process much easier.

If your car is only charged at home then you can use the rate of 4.20 cents per kilometre driven.

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The ATO has revealed there are only a few circumstances that will allow an electric car owner to claim this flat rate.


You can take advantage of the simplified rate if you:

  • use a zero-emissions electric vehicle for gaining or producing assessable income

  • incur electricity expenses when charging their electric vehicle at home, and

  • have kept the relevant records for the income year.

The ATO has warned if you choose this method then you "can't include commercial charging station costs" unless you can "accurately determine the percentage of the vehicle's total charge based on the type of charging location".

"If [your car] does not have that functionality, you need to choose between using the EV home charging rate and commercial charging station costs," Chartered Accountants ANZ Senior Tax Advocate, Susan Franks, said in a statement.

"Always keep a logbook and receipts in case the ATO comes knocking."

The ATO said if you don't have odometer records from the start of the 2022–23 or 2023–24 income or fringe benefits tax (FBT) year, you can use a "reasonable estimate of your service records, logbooks or other available information".

Electric vehicle owners can still choose to calculate the electricity value by determining the actual cost incurred instead of relying on the ATO's guideline.

Sadly for all the plug-in hybrid vehicle, electric motorcycle and electric scooter owners in Australia, this flat rate only applies to zero-emission electric cars.

If you're claiming work-related car expenses using the cents per kilometre method, the ATO has advised this rate has increased to 85c per kilometre for the 2023-24 income year.

"The cents per kilometre rate is an all-inclusive rate and covers all of your eligible car expenses including registration, insurance, repairs, maintenance, fuel, and decline in value," the ATO said.

"You can't claim a deduction for these costs separately, elsewhere in your return."

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