IRD announces 2018 updated Km Rate for a Motor Vehicle
IRD has released an Operational Statement that replaces Operation Statement OS 09/01 Commissioner's statement on use of a kilometre rate for expenditure incurred for business use of a motor vehicle, issued in May 2009. This Statement explains how the kilometre rates are to be applied and also sets the rates for the current year. The current rate is 73 cents - the new rate is 76 cents.
This Statement is made up of two parts. Part One deals with deductions for the business use of a motor vehicle. Part Two deals with the tax treatment of reimbursement payments made by an employer to an employee where the employee uses their private motor vehicle for employment purposes. Both Parts are followed by examples and a flowchart that sets out the process that applies to each.
2018/2019 rates:
Tier 1
Petrol or Diesel, Petrol Hybrid, Electric – 76 cents
Tier 2
Petrol or Diesel – 26 cents
Petrol Hybrid – 18 cents
Electric – 9 cents
Use this link to download the reference and to understand the 2 tier rates stated above.
