(December 14) – The Finance department has announced the new automobile expense deduction limits and rates for businesses in 2000. The limits and rates that will apply for 2000 are as follows:
>The ceiling on the capital cost of passenger vehicles for capital cost allowance (depreciation) purposes will increase from $26,000 to $27,000 for purchases after 1999.
>The limit on deductible leasing costs will increase from $650 per month to $700 per month for leases that start in 2000.
>The limit on tax-exempt allowances paid by employers to employees will increase from 35¢ per km to 37¢ for the first 5,000 km, and from 29¢/km to 31¢/km for each additional kilometre. In the Yukon, the Northwest
Territories, and Nunavut, the allowance will increase from 39¢ to 41¢ for the first 5,000 kms, and from 33¢ to 35¢ for additional kilometres.
>The maximum allowable interest deduction for car loans will remain at $250 per month.
>The general prescribed rate used to determine the taxable benefit relating to the personal portion of automobile operating expenses paid by employers will increase from 14¢/km to 15¢/km. For taxpayers who principally sell or lease cars the rate will increase from 11¢ to 12¢.