2025 Automobile Deduction Limits and Rates Confirmed by Québec

In accordance with the principle of substantial harmonization between Québec and federal tax legislation, the Ministry of Finance has announced that it will adopt the 2025 rates and limits established by the Department of Finance Canada on December 30, 2024. The new rates, effective as of January 1, 2025, are as follows:

• The maximum tax-deductible per-kilometre allowance paid to employees for using their personal vehicles for business purposes has increased by two cents to 72 cents per kilometre for the first 5,000 kilometres and 66 cents per kilometre thereafter. The rates are four cents per kilometre higher in the Northwest Territories, Nunavut, and Yukon.

• The general prescribed rate used to determine the taxable benefit related to the personal portion of automobile operating costs will be 34 cents per kilometre, an increase of one cent over the rate in place for 2024. For employees primarily engaged in the sale or leasing of automobiles, the prescribed rate will also increase by one cent to 31 cents per kilometre.

• The capital cost allowance (CCA) limit for passenger vehicles purchased in 2025 has increased by $1,000 to $38,000 for most vehicles. The limit for eligible zero-emission passenger vehicles (CCA class 54) will remain at $61,000. As a result, the maximum eligible QST input tax refund for a passenger vehicle (that does not qualify as a zero-emission vehicle) acquired in 2025 is $3,790.50.

• The deductible leasing cost limit has increased by $50 to $1,100 per month (plus applicable federal and provincial sales taxes) for leases entered into in 2025. Accordingly, the maximum QST input tax refund that may be claimed for a lease entered into in 2025 is $109.73 per month.

• The maximum deductible interest expense remains unchanged at $350 per month.

Please note that the applicable lease limit is determined by the year in which the lease is entered into, rather than the year in which lease payments are made. For instance, the maximum allowable monthly lease limit is $950 for a lease entered into in 2023 and $1,050 for leases entered into in 2024. The lease limits and associated maximum input tax refunds are summarized in the table below:

The Finance Québec information bulletin is available at the following link: 2025 Québec Automobile Limits

The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals.