The Minister of Finance has announced the automobile expense deduction limits and the prescribed rates for automobile operating expense benefits that will apply for the 2009 taxation year. Specifically, the rates in effect will be as follows:
- The capital cost allowance limit for passenger vehicles purchased in 2009 will remain at $30,000, plus applicable federal and provincial sales taxes. This results in a maximum allowable input tax credit of $1,500 for GST paid (or $3,900 for HST paid) for a passenger vehicle acquired in 2009.
- The limit on deductible leasing costs remains at $800 per month (plus applicable federal and provincial sales taxes) for leases entered into in 2009. Thus, the maximum allowable input tax credit that may be claimed for GST paid in respect of a lease entered into in 2009 is $40 per month ($104 for HST purposes).
- The limit on tax deductible, per kilometre allowances paid to employees for using their personal vehicles for business purposes remains at 52 cents per kilometre for the first 5,000 kilometres, and 46 cents per kilometre thereafter. The rates are 4 cents per kilometre higher in the Northwest Territories, Yukon Territory and Nunavut.
- The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating costs remains at 24 cents per kilometre. For taxpayers employed principally in the selling or leasing of automobiles, the prescribed rate will also remain at 21 cents per kilometre.
The news release may be accessed at the following link: 2009 Automobile Limits