Published | Categories : Income tax - individuals, Income tax - businesses, Source deductions and contributions

Limits and Rates Related to the Use of an Automobile for 2017

The limits and rates for the deduction of automobile expenses and the calculation of the taxable benefits related to the use of an automobile for 2017 are as follows:

  • For purposes of capital cost allowance (CCA), the maximum capital cost of passenger vehicles remains unchanged at $30,000 (plus GST and QST) for vehicles purchased after 2016. 
  • The limit on the deduction of leasing costs remains unchanged at $800 per month (plus GST and QST) for leases entered into after 2016. Under a separate restriction, deductible leasing costs are prorated where the value of the passenger vehicle exceeds the maximum capital cost. 
  • The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes remains unchanged at 54 cents per kilometre for the first 5,000 kilometres and 48 cents for each additional kilometre. 
  • The limit on the deduction of interest paid on amounts borrowed to purchase a passenger vehicle remains unchanged at $300 per month for loans related to vehicles acquired after 2016. 
  • The prescribed rate used to determine the taxable benefit respecting the portion of operating expenses which relates to an employee's personal use of an automobile provided by the employer has been reduced to 25 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate has been reduced to 22 cents per kilometre.

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