PRESCRIBED AUTOMOBILE RATES FOR 2018
The government recently announced the 2018 rates that will apply for the purposes of determining taxable automobile benefits for employees, and the maximum amounts of deductible automobile expenses.
The maximum tax-exempt car allowance deductible for employers for allowances paid to their employees for work purposes is increased by 1 cent from the 2017 amount to 55 cents per kilometre for the first 5,000 kilometres driven, and to 49 cents per kilometre for each additional kilometre driven during the year. For the Northwest Territories, Nunavut and Yukon, the maximum deductible tax-exempt allowance is 4 cents higher (59 cents per kilometre for the first 5,000 kilometres driven, and 53 cents per kilometre above that).
For deductions of car expenses, the maximum ceilings that have been in place for many years remain in place.
For capital cost allowance (tax depreciation), the maximum cost is $30,000 plus applicable federal and provincial sales tax;
For interest on a car loan, the maximum deduction is $300 per 30-day period; and
For car lease costs, the maximum deduction is $800 plus applicable sales taxes per 30-day period, which can be reduced further if the manufacture’s list price of the car exceeds a certain cost ceiling.