From the desk of The Commissioner of Inland Revenue.
The 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 the previous Operation Statement 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||18 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 (being total km travelled, not just the business km travelled).
Tier two includes only the running costs. It applies for the business portion of any travel in excess of 14,000kms.