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Vanessa Williams
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Business running of a motor vehicle

Kilometre rate

manners street signtraffic light-872The Commissioner has issued a new Operational Statement 18/01 – Commissioner's statement on using a kilometre rate for business running of a motor vehicle.

This updates and replaces Operational Statement 09/01 – Commissioner's statement of use of a mileage rate for expenditure incurred for business use of a motor vehicle, issued in May 2009.

The new rules allow the choice between using the cost method (which is based on keeping records of actual costs incurred) or a kilometre rate method which has replaced the mileage rate method from 1 April 2017.

The kilometre rates for the 2017/2018 income year are as follows:
 

2017/2018 kilometre rates

Vehicle type Tier one rate Tier two rate
Petrol or diesel 76 cents 26 cents
Petrol hybrid 76 cents 18 cents
Electric 76 cents 9 cents

Tier one is a combination of the vehicles fixed and running costs. It applies for the business portion of the first 14,000kms travelled by the motor vehicle in a year.

Tier two includes only the running costs. It applies for the business portion of any travel in excess of 14,000kms.
For detailed information, and to read the full operational statement go to www.ird.govt.nz (search keywords: OS 18/01) or call the Alliotts team in Auckland on 09 520 9200.

Topics: Inland Revenue Department mileage rates tax rate