Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Motor vehicle expenditure

DE 11: Replacement vehicles

You could also call this:

“How to handle a replacement vehicle for business use calculations”

If you replace your motor vehicle, you can treat the new vehicle the same way as the old one when figuring out how much you use it for business. This is allowed if two things are true:

  1. Your logbook is likely to show how much you typically use the vehicle for business for the rest of the time you’re meant to keep the logbook.

  2. From the day you start using the new vehicle, you keep a record of how far it travels in total. You need to do this for each year, or part of a year, that’s left in your logbook period.

This rule helps you keep track of your business use when you change vehicles, without having to start a whole new logbook.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513878.

Topics:
Money and consumer rights > Taxes
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DE 10: Variance during logbook term, or

“Changes in business use of your vehicle may require ending your logbook term early”

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DE 12: Kilometre rate method, or

“How to calculate tax deductions for business use of your car”

Part D Deductions
Motor vehicle expenditure

DE 11Replacement vehicles

  1. For the purpose of establishing the proportion of business use of a motor vehicle, a replacement vehicle is treated in the same way as the vehicle it replaces if—

  2. the logbook is likely to be representative of the average travel for business purposes for the remainder of the logbook term; and
    1. from the date of replacement, a person keeps a record of the total distance travelled by the replacement vehicle for each income year, or part of an income year, of the remaining logbook term.

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