Donnelly and Co.
Chartered Accountants
2016 Automobiles Deduction Limits and Expense Benefits Rates : Donnelly

2016 Automobiles Deduction Limits and Expense Benefits Rates

The 2016 automobiles expense deduction limits and prescribed rates for determining the taxable benefit on automobile operating expenses are as follows:
• The ceiling on the capital cost of passenger vehicles for capital cost allowance purposes is $30,000 (plus applicable federal and provincial sales taxes).
• The limit on deductible leased costs is $800 per month (plus applicable federal and provincial sales taxes).
• The limit on tax-exempt allowances paid by employers to employees is $0.54 per kilometer for the first 5,000 kilometers driven and $0.48 for additional kilometers (for Yukon, the Northwest Territories and Nunavut, $0.58 per kilometer for the first 5,000 kilometers driven and $0.52 for additional kilometers).
• The maximum allowable interest deductions for amounts borrowed to purchase an automobile is $300 per month.
• The general prescribed rate used to determine taxable benefit relating to the personal use of automobile paid by employers is $0.26 per kilometer (for taxpayers employed principally in selling or leasing automobiles, $0.23 per kilometer).