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Tax Free Motor Vehicle Allowances

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Business -> Tax-free automobile allowances

Income tax act s. 6(1)(b)(vii.1), Income Tax Regulations s. 7306

The Income Tax Act sets out the following amounts that may be paid tax-free to employees or officers as reimbursement for motor vehicle expenses incurred while travelling for business purposes, using their personal vehicle:

	2008 to 2010	2007/2006	2005	2004/2003
All provinces
-first 5,000 km	$0.52 per km	$0.50 per km	$0.45 per km	$0.42 per km
-over 5,000 km	$0.46 per km	$0.44 per km	$0.39 per km	$0.36 per km
Yukon/Northwest Territories, and Nunavut
-first 5,000 km	$0.56 per km	$0.54 per km	$0.49 per km	$0.46 per km
-over 5,000 km	$0.50 per km	$0.48 per km	$0.43 per km	$0.40 per km

Other resources

On Taxtips.ca - All topics related to vehicles and business

On Canada Revenue Agency website: Automobile allowances.

Revised: December 31, 2009

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