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May 20—The reimbursement rate for the business use of an employee's vehicle decreased for the 2016 income tax year to 72 cents per kilometer from 74 cents, the New Zealand Department of Inland Revenue said May 4 in a statement.
The reduction for gasoline and diesel fuel vehicles stems mostly from lower average fuel costs during the 2016 income year and overall lower operating costs, the department said.
The 2016 income year for most business taxpayers runs from April 1, 2015, to March 31, 2016. Applicable for business travel that is 5,000 km or less in an income year, the mileage rate is set retrospectively for individuals required to file a return for business income, so that the rate reflects the average motor vehicle operating costs for an income year.
The mileage rate does not apply to motorcycles, hybrid cars or electric cars but in the case that an employee does use such motor vehicles, the employer “may make a reasonable estimate of the employee's costs,” revenue department said.
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The Operational Statement with the rates is available at http://www.ird.govt.nz/technical-tax/op-statements/os-review-milage-rate-2016.html.
More information on payroll issues in the New Zealand can be found in the New Zealand country primer.
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