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2019 Automobile Deduction Limits and Expense Benefits rates for Business

2019 Automobile Deduction Limits and Expense Benefits rates for Business

The limit on the deduction of non-taxable allowance paid by employers to employees using their personal vehicle for business purposes in 2019 were released on December 27, 2018 and will increase by 3 cents to 58 cents per kilometre for the first 5,000 kilometres driven and 52 cents for each additional kilometre. For the Yukon, the Northwest Territories and Nunavut, the tax-exempt allowance is 4 cents per kilometre higher, so 62 cents for the first 5,000 kilometres driven and 56 cents for each additional kilometre thereafter.

 

The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by the employer in 2019 will increase by 2 cents to 28 cents per kilometre. For taxpayers employed principally in selling or leasing automobiles, the prescribed rate will increase to 25 cents per Kilometre.

 

The ceiling on the capital cost of passenger vehicles for CCA purposes will remain at $30,000 (plus applicable federal and provincial sale tax). The maximum allowable interest deduction for amounts borrowed to purchase the vehicle will remain at $300 per month. The limit on deductible leasing cost will also remain unchanged at $800 (plus applicable federal and provincial sales taxes). Note that a separate restriction prorates deductible leasing costs where the value of the vehicle exceeds the capital cost ceiling.

 

 

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