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Automobiles—Deductions and Benefits

2012

2013

Deduction limits

1

Maximum cost for capital cost allowance purposes

2

$30,000

$30,000

Maximum deductible monthly lease payment

3

$800

$800

Maximum deductible monthly interest 

cost on automobile loans

4

$300

$300

Maximum deductible allowances paid to employees

First 5,000 employment-related kilometres

53¢

54¢

Each additional employment-related kilometre

47¢

48¢

Taxable benefits

Standby charge benefit

Employer-owned automobile

2% per month of original cost

Employer-leased automobile

2/3 of monthly lease cost

Operating cost benefit per kilometre of personal use

5

26¢

27¢

Allowances

6

Taxable with certain exceptions

Notes

(1) When a motor vehicle is purchased or leased for the purpose of earning income, certain 

expenses may be deducted. The more common types of motor vehicle expenses include 

fuel, insurance, maintenance and repairs, licence and registration fees, capital cost 

allowance, lease payments, and interest. The expenses also include all applicable federal 

and provincial sales taxes (GST, HST, PST and QST) to the extent the taxpayer is not a sales 

tax registrant and does not claim an input tax credit (input tax refund in Québec) for the 

taxes paid.

© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Current as of September 30, 2013