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NZ Tax Agency Updates Mileage Rates

by Mary Swire, Tax-News.com, Hong Kong

18 May 2017


New Zealand's tax agency has announced increase to mileage rates, which are used by self-employed persons and employers to claim tax breaks.

Self-employed persons can use the mileage rate to calculate the cost of using a motor vehicle for business purposes.

Meanwhile, the rates can be used by employers when reimbursing employees or shareholder-employees. The reimbursement is exempt from income tax "to the extent to which it reimburses the employee for expenditure for which the employee would be allowed a deduction if the employment limitation did not exist."

The standard mileage rate will be increased to 73 cents per kilometer for both petrol and diesel fuel vehicles for the 2017 income year, compared with 72 cents for the 2016 income year, the Inland Revenue said. The 2017 income year for business taxpayers with a standard March 31 balance date, runs from April 1, 2016, to March 31, 2017.

This year, the Inland Revenue has also announced mileage rates for hybrid and electric cars for the first time. The mileage rate will be set at 73 cents per kilometer for hybrid vehicles and 81 cents per kilometer for electric vehicles.

TAGS: individuals | tax | business | employees | New Zealand | tax breaks

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