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Business -> Automobiles, Passenger Vehicles and Motor Vehicles -> Automobile Taxable Benefits -> Operating Cost BenefitAutomobile Operating Cost BenefitIncome Tax Act s. 6(1)(k), Income Tax Regulations s 7305.1If the employer has paid the operating costs of an automobile which has been available for the personal use of an employee, an operating cost benefit must be included in the employee's income, less any reimbursements by the employee to the employer. The operating cost benefit is based on the kilometres of personal use by the employee, at the following rates per kilometre:
Operating Cost Benefit ReductionFor 2003 and later years, if the employee uses the automobile primarily (at least 50%) for business purposes, the operating cost benefit may be calculated as 50% of the standby charge, less any reimbursements. Operating Cost Benefit Example
Using the standby charge example, the operating cost benefit
for 2013 would
be: The automobile was used more than 50% for business purposes, so the
alternate calculation available, based on a calculated standby
charge of $4,199, is: Thus, the total taxable benefit to the employee in this example is: Other Resources: All topics related to vehicles and business Tax Tip: If your personal use is less than 50%, make sure your employer is aware that the operating cost benefit should be reduced.
Revised: December 28, 2017 |
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