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Income Tax Act 2007

Deductions - Motor vehicle expenditure

DE 2B: Election to use kilometre rate method or costs method

You could also call this:

"Choose how to claim car expenses on your tax return"

Illustration for Income Tax Act 2007

When you fill out your tax return, you can choose to use the kilometre rate method to work out a deduction for using a motor vehicle for business. You can find out more about the kilometre rate method in section DE 12. You can make this choice for the income year that starts on or after 1 April 2017, or the day you got the motor vehicle, or the day you started using it for business.

If you do not make a choice, you will be treated as having chosen to use the costs method for working out your deduction. You make this choice when you do your tax return for that income year.

Once you have made a choice about using the kilometre rate method or the costs method for a particular motor vehicle, you cannot change your mind. Your choice will apply for all the years you have the motor vehicle, until you get rid of it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7271117.

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Money and consumer rights > Taxes
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Part DDeductions
Motor vehicle expenditure

DE 2BElection to use kilometre rate method or costs method

  1. A person may, in their return of income for an income year, choose to apply the kilometre rate method described in section DE 12 to calculate a deduction for the business use of a motor vehicle and for the income year that includes the latest of—

  2. 1 April 2017, unless the person disposes of the motor vehicle in that income year:
    1. the day on which they acquire the motor vehicle:
      1. the day on which they first start using the motor vehicle for business purposes.

        1. If a person does not make an election under subsection (1), they are treated as making an election in the return of income to use the costs method for the corresponding income year.

        2. An election made under subsection (1) or (2) in relation to a particular motor vehicle cannot be revoked, and applies for all subsequent income years until the end of the income year that includes the day on which the person disposes of the motor vehicle.

        Notes
        • Section DE 2B: inserted, on (applying for the 2017–18 and later income years), by section 74 of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).