Increase in the Capital Cost Allowance Rate Applicable to Trucks and Tractors
In the Budget Speech of March 30, 2010, the Québec Minister of Finance announced that the CCA rate applicable to trucks and tractors designed for hauling freight would rise from 40% to 60%.
Eligible vehicles (trucks or tractors) must meet the following conditions:
- they must be acquired after March 30, 2010
- they must be new at the time they are acquired
- they must be used primarily for hauling freight
- they must have a gross vehicle weight rating in excess of 11,788 kilograms
- they must be used by a taxpayer, or a person with whom the taxpayer does not deal at arm’s length, in a business that includes hauling freight
The half-year rule applies to property covered by the rate increase.
The 60% CCA rate will also apply to additions and modifications made to trucks or tractors to enable them to run on liquefied natural gas (LNG).
A truck or tractor that is fuelled by LNG is eligible for an additional deduction, equal to 85% of the amount deducted using the 60% CCA rate applicable to trucks and tractors.
This additional deduction can be claimed where
- the vehicle is acquired after March 30, 2010, but before January 1, 2016
- the vehicle is considered to be fuelled by LNG at the time it is acquired, or additions or modifications enabling it to be fuelled by LNG are made within 12 months following its acquisition
- the vehicle is used mainly in hauling freight during a period of 730 consecutive days following the day it is first used
It is important to note that the additional deduction cannot be claimed more than once with respect to the same vehicle.
For more information, see page A.98 in Additional Information on the Budgetary Measures, published by the Ministère des Finances.