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ITCs on Motor Vehicle Allowances

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GST/HST -> GST/HST input tax credits on motor vehicle allowances

GST/HST input tax credits on motor vehicle allowances

Excise Tax Act s. 174

When an employer pays reasonable motor vehicle allowances to an employee for the reimbursement of the employee's motor vehicle expenses while on the job (see Tax free motor vehicle allowances on the Small Business page), an input tax credit can be claimed.

The input tax credit amount for after December 31, 2007 is:

	13/113 x the allowance when the expenses are incurred in an HST province where the HST rate is 13%, and
	5/105 x the allowance when the expenses are incurred in a GST province.

The input tax credit amount for July 1, 2006 to December 31, 2007 is:

	14/114 x the allowance when the expenses are incurred in an HST province, and
	6/106 x the allowance when the expenses are incurred in a GST province.

The input tax credit amount prior to July 2006 is:

	15/115 x the allowance when the expenses are incurred in an HST province, and
	7/107 x the allowance when the expenses are incurred in a GST province.

Revised: December 10, 2009

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