Can I deduct the cost of charging my electric vehicle?

This has become a common tax question.  And the answer is it depends whether you can deduct the cost of charging your electric vehicle.

No claim is available if you claim work car expenses under the cents per kilometre method.  That is because the per kilometre rate takes into account charging costs.

Electric charging costs can be claimed at the rate of 4.20 cents pkm where:-

  • Claiming car expenses under the log book method.
  • Motor vehicle expenses for vehicles that are not a car (such as a one-tonne ute).

To qualify to use this rate you must satisfy the following three conditions:-

  1. The car or vehicle is a zero emissions vehicle. It is important to note that hybrid vehicles are not zero emission vehicles.
  2. You must have incurred electricity costs at home.
  3. You have kept relevant records.

There are 3 relevant records to keep:-

  1. A valid log book.
  2. Opening and closing odometer readings.
  3. An electricity bill (with proof of obligation to pay if in a shared house).

What if I charge my vehicle out of home?

Thankfully the ATO have dropped their initial harsh stance of not allowing such claims.

To be able to claim such costs, the vehicle must have functionality that accurately reports the percentage of a vehicle’s total charge based on the charging location.  One is then to adjust the home charging percentage adjusted accordingly.

If your electric vehicle doesn’t identify charging by location then one can only claim either:-

  • The home charge at 4.2 cents pkm or
  • Commercial charging charge costs.

But not both.

We hope this charges up your tax claim – but please contact us if you have any queries.

At MRS, we will spend today planning for your success.