The limit on the deduction of tax-exempt allowances paid by employers to employees using their personal vehicle for business purposes for 2013 has increased to 54 cents per kilometre for the first 5,000 kilometres driven (from 53 cents) and to 48 cents for each additional kilometre (from 47 cents). For the Yukon, the Northwest Territories and Nunavut, the tax-exempt allowance has increased to 58 cents for the first 5,000 kilometres driven (from 57 cents) and to 52 cents for each additional kilometre (from 51 cents).
In addition, the general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers for 2012 will increase to 27 cents per kilometre (from 26 cents). For taxpayers employed principally in selling or leasing automobiles, the prescribed rate will increase to 24 cents per kilometre (from 23 cents).
The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes, the limit on deductible leasing costs for leases entered into after 2012 and the maximum allowable interest deduction for amounts borrowed to purchase an automobile remain unchanged from their 2012 amounts.
The limits and rates for 2013 and 2012 are as follows:
For more information, contact your KPMG adviser.
Information is current to January 08, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500