Vehicle expenses apportionment of a close company

The choice of election between the kilometre rate method or the costs methods in Income Tax 2007 was inserted by the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017.¹

This act² also made the apportioning applicable to a close company. The definitions part of the Income Tax Act³ defines a close company as one which has 5 or fewer natural persons whose voting interest makes up more than 50%.  The business use of a motor vehicle by a shareholder-employee of the close company will be treated as business use by the close company.⁴

1.https://www.legislation.govt.nz/act/public/2017/0003/latest/DLM6912564.html

2.https://www.legislation.govt.nz/act/public/2017/0003/latest/DLM6912562.html

3.https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1520575.html

4.https://www.legislation.govt.nz/act/public/2007/0097/latest/DLM1513841.html