Quantcast
Wednesday , March 29 2017
Breaking News
Home / International Customs / Canada / Canada reviews tax relief for fringe benefits
Canada reviews tax relief for fringe benefits

Canada reviews tax relief for fringe benefits

OTTAWA: The Canadian Government has announced the income tax deduction limits and expense benefit rates that will apply in 2017 when using an automobile for business purposes.

There is one change taking effect as of 2017. The general prescribed rate that is used to determine the taxable benefit of employees relating to the personal portion of automobile operating expenses paid by their employers will be reduced from 26 cents to 25 cents per kilometre. For taxable employees who are employed principally in selling or leasing automobiles, the prescribed rate will be reduced from 23 cents to 22 cents per kilometre.

The limits on the deduction of tax-exempt allowances that are paid by employers to employees who use their personal vehicle for business purposes will remain at the 2016 caps. These were 54 cents per kilometre for the first 5,000 kilometres driven, and 48 cents per kilometre for each additional kilometre. For the Northwest Territories, Nunavut, and Yukon, the tax-exempt allowance is four cents higher.

The ceiling on the capital cost of passenger vehicles for capital cost allowance purposes will remain at CAD30,000 (USD22,335) (plus applicable federal and provincial sales taxes) for purchases after 2016. The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at CAD300 per month for loans related to vehicles acquired after 2016. Finally, the limit on deductible leasing costs will remain at CAD800 per month (plus applicable federal and provincial sales taxes) for leases entered into after 2016.