TaxTips.ca - Small Business - 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:

Rates per km	2012	2008-2011	2007/2006	2005	2004/2003
All provinces
-first 5,000 km	$0.53	$0.52	$0.50	$0.45	$0.42
-over 5,000 km	$0.47	$0.46	$0.44	$0.39	$0.36
Yukon/Northwest Territories, and Nunavut
-first 5,000 km	$0.57	$0.56	$0.54	$0.49	$0.46
-over 5,000 km	$0.51	$0.50	$0.48	$0.43	$0.40

Other resources

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

On Canada Revenue Agency website: Automobile allowances.

Revised: December 29, 2011

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