Tax Alert | Quebec Confirms 2024 Automobile Deduction Limits and Rates

The Quebec Ministry of Finance has once again announced that it will adopt the automobile deduction rates and limits put in place by the federal Department of Finance for the current year. As of January 1, 2024, the rates in effect for provincial tax purposes are as follows:

• The limit on tax-deductible per kilometre allowances paid to employees for using their personal vehicles for business purposes has increased by two cents to 70 cents per kilometre for the first 5,000 kilometres and 64 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 relating to the personal portion of automobile operating costs is 33 cents per kilometre, which is the same rate that was in place for 2023. For taxpayers employed predominantly in the selling or leasing of automobiles, the prescribed rate is also unchanged at 30 cents per kilometre.
• The capital cost allowance limit for passenger vehicles purchased in 2024 has increased by $1,000 to $37,000 for most vehicles, with the limit for eligible zero-emission passenger vehicles (CCA class 54) remaining at $61,000. This results in a maximum allowable input tax refund of $3,690.75 for QST paid on a passenger vehicle (which does not qualify as a zero-emission passenger vehicle) acquired in 2024.
• The limit on deductible leasing costs has increased by $100 to $1,050 per month (plus applicable federal and provincial sales taxes) for leases entered in 2024. Thus, the maximum allowable input tax refund that may be claimed for QST paid in respect of a lease entered in 2024 is $104.74 per month.

Please note that the applicable lease limit is determined by the year in which a lease is entered, rather than the year in which lease payments are made. The allowable monthly lease limit is $800 for a lease entered into before January 1, 2022, $900 for a lease entered during 2022, and $950 for automobile leases entered in 2023. The lease limits and associated maximum input tax refunds are summarized in the chart below:

The information bulletin may be accessed at: 2024 Automobile Limits