Tax Tips-Increases to Automobile Limits effective January 1, 2023

For passenger vehicles purchased on or after January 1, 2023, the maximum limit for capital cost allowance increased to $36,000.  Previously, the maximum limit was $34,000 for passenger vehicles purchased in 2022, and $30,000 if purchased prior to 2022.

For passenger vehicles newly leased on or after January 1, 2023, the maximum deductible amount increased to $950 per month before GST/HST.  Previously, the maximum deductible amount was $900 per month for passenger vehicles newly leased in 2022, and $800 per month prior to 2022.

For zero-emission passenger vehicles purchased on or after January 1, 2023, the maximum limit for capital cost allowance increased to $61,000.  Previously, the maximum limit was $59,000 if purchased in 2022, and $54,000 if purchased prior to 2022.

The mileage allowance rates considered reasonable for employers to reimburse employees for business use of their personal vehicle increased on January 1, 2023 to $0.68 per km for the first 5,000km, and to $0.62 for every km thereafter.  In the previous year 2022, it was $0.61 per km for the first 5,000km, and $0.55 for every km thereafter.

The above information is of a general nature only and should not be relied upon for specific situations.  Call Marlies Y Hendricks, CPA at 416-766-3941 or submit email enquiry form below to set up a consultation.