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The ATO has released draft legislative instrument Income Tax Assessment (Cents per Kilometre Deduction Rate for Car Expenses) Determination 2026, proposing an increase to the cents per kilometre rate to 91 cents for the 2026-27 income year.
The new rate of 91 cents per kilometre comprises:
- a base rate of 89 cents per kilometre; and
- a temporary one-off uplift of 2 cents for 2026-27.
From later income years, indexation will be applied to the 89cent base rate (i.e. the 2 cent uplift will not carry forward).
Once finalised, the Instrument will apply from 1 July 2026.
