29 December 2020
Canada's Department of Finance has issued a release on 21 December announcing the 2021 automobile deduction limits and expense benefit rates for businesses.
Government Announces the 2021 Automobile Deduction Limits and Expense Benefit Rates for Businesses and Temporary Adjustments to the Automobile Standby Charge due to COVID-19
Today, the Department of Finance Canada announced the automobile income tax deduction limits and expense benefit rates that will apply in 2021.
Most of the limits and rates that applied in 2020 will continue to apply in 2021, with one change taking effect as of January 1, 2021:
The following limits from 2020 will remain in place for 2021:
In light of the impact COVID-19 lockdowns and public health measures have had on how employees use their employer-provided vehicles, the government is also proposing temporary adjustments to the automobile standby charge. For the 2020 and 2021 taxation year, it is proposed that employees be allowed to use their 2019 automobile usage to determine eligibility for the reduced standby charge. Only employees with an automobile provided by the same employer as in 2019 would be eligible for this option. For more information, please refer to the related backgrounder.
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