March 2016
AUTOMOBILE EXPENSES
The rates for automobile expenses, deduction limits and the prescribed rates for determining taxable benefits on automobile operating expenses are as follows for 2016.
| 2016 | 2015 | |
|---|---|---|
| Maximum capital cost of a passenger vehicle for the purposes of capital cost allowance | $30,000 (1) | $30,000 (1) |
| Allowable interest expenses | $300 per month | $300 per month |
| Allowable leasing expenses (2) and (3) | $800 per month (1) | $800 per month (1) |
| Tax-exempt allowances paid by the employer to the employee – based on the distance the employee travels in his or her automobile: | ||
| First 5,000 kilometres | $0.54 per km | $0.55 per km |
| Any additional kilometres | $0.48 per km | $0.49 per km |
| Operating costs benefit respecting an automobile provided by the employer and used by the employee for personal purposes | $0.26 per km | $0.27 per km |
(1) Does not include the GST and/or the QST.
(2) Please note that the lease limit remains the same during the entire period of the lease.
(3) This limit is one of the two restrictions on the deduction of automobile lease payments. A separate restriction prorates deductible lease costs where the value of the automobile exceeds the maximum capital cost.
PERSONAL TAX BRACKET AND CREDIT INDEXATION
The 2016 indexation adjustment for personal income tax brackets, non-refundable credits and benefits has been set at 1.3% federally and 1.09% in Quebec. Please click the following links for the detailed increases:
Federal: http://www.cra-arc.gc.ca/nwsrm/fctshts/2015/m12/fs151208-eng.html
Quebec: http://www.revenuquebec.ca/en/salle-de-presse/nouvelles-fiscales/2015/2015-11-20.aspx
For additional information, please contact a member of our Tax Department.
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