CRA Standard Rate rises slightly in 2018
By Canadian auto dealer Jan 3, 2018
The Automobile Deduction Limits and Expense Benefit Rates for Business, otherwise known as the CRA Standard Kilometre Rate, has gone up slightly in 2018.
Most of the income tax deduction limits and expense benefit rates concerning the use of a vehicle for business purposes have remained the same for 2018. However, some changes have been made:
“Effective January 1, the CRA Cents Per Kilometre Rate for 2018 is up 1 cent to 55 cents per kilometre for the first 5,000 kms and 49 cents over 5,000 kms,” according to CarData’s news release. “The standard kilometre rate for business is based on an annual study of the fixed and variable costs of operating an automobile.”
The rate has hovered around the 54 and 55 cents per kilometre range since 2013. Prior to this period, the rate had been slowly increasing from 42 cents in 2003 to 53 cents in 2012.
As for which income tax deduction limits will not change this year, The Department of Finance Canada said: “The ceiling on the capital cost of passenger vehicles for capital cost allowance (CCA) purposes will remain at $30,000 (plus applicable federal and provincial sales taxes) for purchases after 2017. This ceiling restricts the cost of a vehicle on which CCA may be claimed for business purposes. The limit on deductible leasing costs will remain at $800 per month (plus applicable federal and provincial sales taxes) for leases entered into after 2017.”